# Strix Group Plc Completes acquisition of specified assets of HaloSource

- Link: https://www.directorstalkinterviews.com/strix-group-plc-completes-acquisition-of-specified-assets-of-halosource/412768922
- Published: 2019-03-08T07:17:05+00:00
- Author: Giles Arbor

As previously announced on 7 February 2019, **[Strix Group Plc](https://www.directorstalkinterviews.com/company/strix-group-plc/ketl.l)**(
LON: KETL), the global leader in the design, manufacture and supply of kettle safety
controls and other complementary water temperature management components, confirms
today that, following approval by HaloSource Corporation shareholders at the general
meeting held on 26 February 2019, the acquisition of specified assets from HaloSource
has now completed. Strix has entered into an asset purchase agreement with HaloSource,
pursuant to which it will acquire specified assets relating to HaloSource’s HaloPure
division and its Astrea product, for total consideration of US$1.33 million.

The Board of Strix believe that the Acquisition represents an opportunity to acquire
extensively developed technology, which is complementary to its Aqua Optima division,
at an attractive price, as well as gaining access to skilled research and development
resource in the USA. Strix will continue the process of commercialising the technology
and products that it has acquired, leveraging its experience of operating in the
water filtration sector and bringing to market new consumer products.

**Strategic Rationale**

The Board consider that the medium term opportunities presented by the Acquisition
include:

– Integration and commercialisation of HaloSource’s technically advanced water purification
technologies within Strix to expand existing product portfolio and market penetration.

– An expanded operational presence for Strix, including the creation of an innovation
centre for water filtration in the USA utilising the high quality R&D staff transferring
from HaloSource.

– Additional customer and supplier relationships in China for the water filtration
division.

– Expansion and enhanced differentiation of the Aqua Optima product range, using
HaloSource developed technology.

– Potential for operational synergies in China, including the utilisation of Strix’s
new and larger manufacturing facility scheduled to be operational during 2021.

– Opportunity for additional revenue generation in a range of markets worldwide,
both by marketing the acquired technologies and products on a standalone basis (
including to existing Strix customers), and by improving Strix’s existing product
portfolio utilising the acquired technologies.

– Ongoing development of the existing advanced water purification technology to 
address specific market requirements and develop a range of products that remove
impurities to deliver safe drinking water to consumers globally.

History of HaloSource and description of the assets being acquired

HaloSource has attracted and deployed significant investment over the past 20 years,
and as a result, has developed two technically advanced water purification technologies
that are being acquired by Strix pursuant to the Acquisition.

HaloSource has two primary patented technologies – a bromine based water treatment
bead system proven to kill 99.99%+ of bacteria and viruses, and a composite filter
material certified to remove heavy metals from water, with its main differentiator
being its lead removal performance.

HaloSource has also developed a consumer product (Astrea) using its filter technology.
This product is a reusable portable water bottle with changeable filters that is
certified to remove lead from tap water. Lead removal is a major differentiator 
in the USA in particular, where a number of health scares have occurred due to lead
levels in drinking water.

Astrea allows consumers to obtain filtered drinking water at a much lower cost per
litre than bottled water, whilst avoiding the negative environmental impact of plastic
water bottle usage. Astrea was launched in late 2018 and is available via a number
of distribution channels as a subscription product including the delivery of regular
replacement filters.

**Financial Impact of the Acquisition**

The Board currently anticipates that the Acquisition will result in a net P&L investment
by the group of approximately £2m in the 2019 financial year, but that the Acquisition
will be earnings enhancing in the financial year to 31 December 2021. The Company
will provide further guidance as appropriate following a suitable period of ownership.

> **Mark Bartlett, CEO of Strix Group Plc, commented:**
> “We are very pleased to be adding to our technology and product portfolios through
> this acquisition of value adding assets. We maintain that the USA is a key geography
> for us and this transaction offers us a stronger presence in this market. As well
> as bringing additional customer and supplier relationships, we see the opportunity
> to provide increased differentiation to further expand our filtration division.”

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