Xebec Adsorption Inc (XBC)

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Xebec Expands Product Portfolio and Enters German Hydrogen and Renewable Natural Gas Markets with Acquisition of Inmatec
December 17 2020 - 04:10PM

Xebec Adsorption Inc. (TSXV: XBC) (“Xebec” or the "Corporation"), a global provider of clean energy solutions, is pleased to announce it has entered into a definitive agreement to acquire all of the issued and outstanding shares of Inmatec Gase Technologie GmbH & Co. KG, Inmatec GmbH and Inmatec Gas Technology FZC RAK (collectively, “Inmatec”), in the United Arab Emirates (the “Acquisition”).

"We’re excited to be announcing another strategic acquisition for us this month. Inmatec builds on our thesis for onsite generation of gases as it enables customers to achieve significant cost and emission reductions," said Kurt Sorschak, Chairman, CEO and President of Xebec Adsorption Inc. “Inmatec is one of the world leaders in onsite nitrogen and oxygen generators and has achieved impressive scale with over 8,000 units deployed worldwide. Their German manufacturing and engineering capabilities have resulted in a reputation for high quality and extremely reliable products.”

"Notably, Inmatec complements both our onsite hydrogen generators, which are produced by HyGear and our own industrial air and renewable natural gas products. We see good value in cross-selling these solutions throughout our industrial service companies in North America and our combined customer base. Most importantly, Inmatec will give us a Cleantech Service Network footprint in parts of Europe, the Middle East and Africa, and an entry into the German hydrogen and RNG market. There are over 8,900 biogas installations which could be converted to produce RNG and Germany has announced plans to invest up to Euro 9 billion in hydrogen. Inmatec is ideally positioned to leverage their 40+ distribution partners to also sell our renewable natural gas and hydrogen systems."

"As we look forward to 2021, we’re excited to be increasing the scope of our capabilities and evolve into a truly global company. I’d like to once again congratulate all the teams on all their hard work and give Inmatec a warm welcome to the Xebec family,” added Mr. Sorschak.

Inmatec Acquisition Overview and Rationale
Worldwide leader in onsite nitrogen and oxygen products
Founded in 1993, Inmatec is an international market leader in the production of nitrogen and oxygen generators. Designed, developed and produced in Germany, over 8,000 Inmatec systems have been deployed and sold around the world. Similar to HyGear, onsite generation of nitrogen and oxygen reduces the need for transportation, saving on costs and reducing the burden on the environment.

Growth opportunities by bringing products to North America and cross-selling
Inmatec’s products and manufacturing are among the best-in-class and this acquisition will give Xebec an accelerated entry into offering these products in North America. Currently, Inmatec’s target markets are in parts of Europe, the Middle East and Africa (“EMEA”). Due to the complementary nature of customers and industries, Xebec’s and HyGear’s products can also be sold through Inmatec, giving another sales channel and platform for growth in the EMEA region.

Cleantech Service Network expansion into Europe and entry into German Hydrogen renewable natural gas markets
With over 260 technicians actively servicing equipment across Europe, Inmatec’s own and partner workforce will be retrained and retooled to work with renewable gases. This positions Xebec favorably in the purchasing decision process when customers select a vendor for a multi-million-dollar hydrogen or renewable natural gas installation. Xebec believes service is an important customer need and sees it as a competitive advantage due to the lack of a similar offerings from other vendors.

In addition, Inmatec’s distribution network of 40+ worldwide and regional partners create an opportunity to enter Germany’s evolving hydrogen market and Europe’s largest potential renewable natural gas market. Germany has approximately 8,900 active biogas installations and approximately 280 of them are producing RNG today. These existing facilities are potential candidates for conversion to renewable natural gas and potentially decentralized green hydrogen production.

Exposure to the fast-growing medical oxygen market
Inmatec’s business operations have expanded significantly year-over-year from 2019 to 2020. This expansion is largely attributed to the associated demand from the COVID-19 pandemic response, which requires larger amounts of medical grade oxygen in hospitals around the world. This exposure is beneficial to Xebec by giving the company the capabilities to now manufacture and sell this equipment in North America and makes the company one of the few with these capabilities in Canada. Ultimately, the pandemic has helped hospitals realize the cost benefits and self-sufficiency that comes with onsite oxygen generation.

The Acquisition, which is one of the two “LOI Acquisitions” announced by Xebec on December 8, 2020, will be financed with the proceeds from the public offering and the concurrent private placement announced by Xebec on December 8, 2020 and December 9, 2020. The release of proceeds from such public offering and the concurrent private placement and the exchange of the subscription receipts into common shares of the Corporation are not conditional upon the closing of the Acquisition. The Acquisition is expected to close on or about February 28, 2021. The Acquisition has been unanimously approved by the Board of Directors of Xebec and is subject to regulatory approval and other customary closing conditions.

Advisors
Desjardins Capital Markets and TD Securities Inc. acted as financial advisors on the Acquisition.

Related links
https://www.xebecinc.com
https://www.inmatec.de/en/startsite.html

Investor Relations:
Xebec Adsorption Inc.
Brandon Chow, Investor Relations Manager
[e-mail]
+1 450.979.8700 ext 5762

Media Inquiries:
Public Stratégies et Conseils for Xebec
Victor Henriquez, Senior Partner
[e-mail]
+1 514.377.1102