Venture-backed ProSep takes next steps to acquisition by PWA

Montréal-based ProSep Inc (TSX: PRP) has obtained protection under the Companies’ Creditors Arrangement Act, as well as approval from the Superior Court of Québec concerning its previously announced acquisition by Produced Water Absorbents Inc (PWA) for $9.2 million. The acquisition is expected to close no later than November 22, 2013. ProSep, a developer of  process solutions to the upstream oil and gas industry, is a portfolio company of Cycle Capital Management, Fondaction CSN and other investors, while the Houston, Texas-based PWA is backed by Norway’s Energy Ventures and U.S.-based Harris and Harris Group.


ProSep Inc. Announces Granting of Approval and Vesting Order by the Court

MONTREAL, QUEBEC, Oct 29, 2013 (Marketwired via COMTEX) — ProSep Inc. CA:PRP 0.00% (“ProSep” or the “Company”) announced today it has obtained creditor protection pursuant to the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”). At the same time, the Superior Court of Quebec (Commercial Division) (the “Court”) issued an order (the “Court Approval and Vesting Order”) approving the previously announced sale of substantially all assets of ProSep (the “Sale Transaction”) to a newly incorporated subsidiary of Produced Water Absorbents, Inc., PWA ProSep, Inc. (“PWA” or the “Purchaser”).

The Sale Transaction will be effected pursuant to an asset purchase agreement dated October 23, 2013 (the “Agreement”) between ProSep and the Purchaser. The Company will receive an aggregate consideration of approximately $9,200,000 for the acquisition of substantially all of its assets, subject to certain adjustments. Closing of the Sale Transaction is expected to occur on or about November 11, 2013 and in any event no later than November 22, 2013. The Court Approval and Vesting Order provides for the vesting in the Purchaser of the rights, title and interest in ProSep’s assets, free and clear of all security interests (subject to certain limited exceptions) upon closing of the Sale Transaction in accordance with the terms and conditions of the Agreement. Closing remains subject to the satisfaction of certain closing conditions.

As a result of the sale, ProSep will no longer have any operating assets or active business. As announced by the Toronto Stock Exchange on October 24, 2013, the shares of the Company are currently suspended from trading and will remain halted until the close of business on November 18, 2013, at which time they will be delisted.

The CCAA proceedings will not affect the Company’s day-to-day operations. ProSep’s subsidiaries are not subject to the CCAA proceedings. ProSep’s subsidiaries have access to the funding necessary to maintain operations and the business will continue without disruption during this period. ProSep’s subsidiaries will continue to fulfill their obligations to their customers and suppliers.

About ProSep

ProSep is a technology-focused process solutions provider to the upstream oil and gas industry. ProSep designs, develops, manufactures and commercializes technologies to separate oil, water and gas generated by oil and gas production. For more information, please visit

About PWA

Produced Water Absorbents, Inc. (PWA) is a technology company which provides waste treatment solutions and services to the oil and gas industry. It was founded in 2011 when venture capital funding was secured from Energy Ventures of Norway and Harris and Harris Group, Inc. from the USA. The foundation of the offering is a patented, regenerable and game-changing technology called Osorb(R) Media. Osorb adsorbs free, dispersed and soluble hydrocarbons from produced water and other waste water streams to meet or exceed environmental discharge requirements. Osorb also removes C4 and heavier hydrocarbons from gas streams to improve the value of sales gas (hydrocarbon dew point reduction), improve burner efficiency (including flares), and to control other environmental gaseous emissions. For more information, please visit

Caution concerning forward-looking statements

This press release may contain forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can generally be identified by the use of the conditional tense, the words “may”, “should”, “would”, “believe”, “plan”, “expect”, “intend”, “anticipate”, “estimate”, “foresee”, “objective” or “continue” or the negative of these terms or variations of them or words and expressions of similar nature. In particular, forward-looking statements regarding ProSep’s proceedings under the CCAA, the Sale Transaction and the approvals required thereunder, plans for its business development strategy, anticipated customer orders, sales and revenues, financial and operational projections and anticipated results, anticipated results of field testing with potential customers and expected benefits of ProSep’s proprietary technologies; and anticipated impact on ProSep of the factors discussed under the heading Selected Risks in the latest management discussion and analysis document (“MD&A”). These forward-looking statements are based on, among other things, management’s assumptions, expectations, estimates, objectives, plans and intentions as of the date hereof pertaining to, but not limited to demand for ProSep’s solutions, projected revenues and expenses, the economic and industry environments in which the Company operates or which could affect its activities, the Company’s ability to attract new customers, projected operating costs and cost of raw materials and energy supply, expected timing and amount of capital expenditures program of ProSep’s potential customers, target market acceptance of ProSep’s solutions, current and future solutions performance, evolving market conditions for oil & gas producers; and success of commercialization approach and strategic partnership initiatives. Although ProSep believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because ProSep can give no assurance that they will prove to be correct. Because forward-looking statements address future events and conditions, by their very nature they involve numerous inherent risks and uncertainties that contribute to the possibility that the forward-looking statements may prove to be incorrect. ProSep cannot assure investors that any of these forward-looking statements will prove to be accurate. Further, if any of these statements are inaccurate, the inaccuracy may be material.

Actual performance and results could differ materially from those currently anticipated in the forward-looking statements due to a number of factors and risks. Some of the factors that could cause such differences include, but are not limited to: the discretion of the Court in the CCAA proceedings, delays resulting from or inability to obtain required approvals, uncertainty as to market acceptance of new solutions and possible technological change, competition, economic environment and especially conditions in the oil & gas industry, legislative or regulatory developments, ProSep’s ability to penetrate core markets, expand into new markets and manage future growth, the need for additional financing and uncertainties as to access to sufficient capital financing on acceptable terms, uncertainty as to achievement of profitability and ability to meet cash requirements, availability and retention of management and key personnel, the long sales and implementation cycles for ProSep’s solutions, reliance on major customers, manufacturing, project execution, product defect and product liability risks, dependence on third party suppliers, exchange rate and currency fluctuations, protection of ProSep’s intellectual property rights; and risks related to ProSep’s foreign operations and compliance with anti-corruption and anti-bribery laws. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause actual results to differ materially from current expectations are further discussed under “Selected Risks” in the latest MD&A. In light of the significant risks and uncertainties in these forward-looking statements, investors should not place undue reliance on or regard these statements as a representation or warranty by the Company or any other person that the Company will achieve its objectives, strategies and plans in any specified time frame, if at all. The forward-looking statements contained or incorporated by reference in this management discussion and analysis relate only to events as of the date on which the statements are made. Except as required under applicable securities legislation, the Company does not undertake to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Photo courtesy of Shutterstock