General Environmental Management, Inc. (GEM) announced this morning that it has signed a definitive letter of intent to acquire Santa Clara Waste Water (SCWW), a profitable, 50 year old wastewater treatment business. Earning the reputation of being one of the top 100 privately owned non-hazardous wastewater utilities in the U.S., SCWW has treated more than 2 billion gallons of wastewater.

“We are thrilled to have come to an agreement to acquire SCWW and are eager to work with them to achieve their goal of becoming the premier independent non-hazardous wastewater management company; first in California, then the western region and eventually in the United States,” stated Tim Koziol, GEM Chief Executive Officer. “We are acquiring not only a long time successful company with a great track record and valuable assets, but are partnering with one of the finest management teams in the environmental management business led by SCWW CEO, Doug Edwards. Doug and his team have set the standard for wastewater management. Their facility situated on five acres of strategically located land in Santa Clara Valley, along with their unique and invaluable 12.7 mile pipeline from their facility to the City of Oxnard’s water reclamation center, gives GEM a corner stone to build a regional and then national presence in the water treatment market.”

“After getting to know GEM over that past few years, I am very excited to be uniting with their management team to build upon the success we have earned at SCWW,” commented Doug Edwards. “I have had a vision of growth for SCWW and am confident that by teaming with GEM, together we’ll be able to make that vision a reality. The wastewater treatment market is large and will continue to grow as demand for water treatment increases exponentially. With its key assets, experience, knowledge set and strategic plan, SCWW is uniquely positioned to become one of the foremost wastewater treatment companies in the U.S. In addition, we have a number of unique products and services in development that we can bring to market faster and with greater efficiency with the help of GEM’s talented management group.”

GEM Chief Financial Officer, Brett Clark, added, “SCWW has a very profitable business model. We are acquiring the company and all of its assets for approximately three times its trailing EBITDA, plus the assumption of long term debt secured by SCWW’s plant and equipment. SCWW’s revenues in 2008 were approximately $7.6 million. The transaction is very accretive to GEM and will be paid for with a combination of cash, debt, and stock over the next three years. Details of the transaction will be provided upon closing, which is expected to occur within the next 60 days.”

Tim Koziol also provided an update on GEM’s strategic plan, ”We will be focused on closing the SCWW transaction and continuing our research and development to strategically enter the waste-to-energy markets as discussed in last week’s news release. We will keep shareholders posted on all developments.”

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