Tirex Begins Rubber Molding Operations - to Acquire 80.6% of Enviromax Rubber Inc.
17 March 1999
Tirex Begins Rubber Molding Operations - to Acquire 80.6% of Enviromax Rubber Inc.
MONTREAL, March 17 -- The Tirex Corporation
(OTC Bulletin Board: TXMC) announced today that it has entered into an
agreement in principle to acquire 80.6% of Les Caoutchoucs Enviromax Inc. aka
Enviromax Rubber Inc., a Montreal manufacturer of rubber products molded out
of recycled rubber. This week Tirex began manufacturing molded rubber welcome
mats under its five-year, exclusive supplier contract with IM2 Merchandising
and Manufacturing, Inc. of Quebec, Canada. Tirex plans to use rubber crumb
recycled out of scrap tires through its patented TCS-1 Plant in the
manufacture of molded rubber products, beginning with, but not limited to,
rubber mats and the products presently in Envriromax's product line. Terence
C. Byrne, Tirex's Chairman and CEO, stated that the Enviromax acquisition
should give Tirex sufficient production capacity to produce up to 1.6 million
mats per year, which will meet its requirements under the IM2 contract for the
next three years.
IM2 is the exclusive supplier of certain rubber crumb molded products for
a major national distributor of consumer and commercial floor matting products
through well established distribution channels including large national retail
outlets such as Home Depot. Tirex's five-year contract with IM2 makes it
IM2's exclusive supplier of rubber mats and related products. Current
delivery schedules for the current year, call for minimums of 4,000 mats in
March, 29,000 mats in April, and 80,000 mats per month through the end of the
first year.
The Enviromax acquisition will provide Tirex with a fully equipped, 10,000
square foot rubber molding facility currently capable of transforming
approximately eight million pounds of recycled rubber crumb per year into
finished products using various production technologies, vulcanization,
plastic/rubber compound molding, and other molding operations using various
binding products. The plant is equipped with, among other things, a high
capacity thermo mixer extruder, several hydraulic presses and special
tunneling ovens operating on a continuous product flow.
To date, Enviromax has been engaged in manufacturing manhole and catch
basin frames with adjustment rings made out of recycled rubber from used
tires. While Enviromax projects that its sales this season will reach
approximately $500,000 USD, its operations have not been profitable to date.
However, Mr. Byrne stated that the economies of scale, which will result from
the combination of Tirex's and Enviromax's product lines, should make
Enviromax's present manufacturing operations profitable in the future.
Tirex will acquire 80.6% of the issued and outstanding common and
preferred stock of Enviromax directly from five of its six present
shareholders for a total purchase price of approximately $390,000 USD
consisting of approximately $130,000 USD in cash, approximately $32,500 USD in
a 30-day promissory note, and approximately $227,500 USD in Tirex's three-year
convertible debentures bearing interest at 3% over prime rate. The debentures
will be convertible over a three year period, commencing one year from
issuance, at a rate equal to the market price at the time of conversion.
Only one of Enviromax's present shareholders, Innovatech Grand Montreal,
will retain its interest in Enviromax after the acquisition. Innovatech is
wholly owned by the Government of Quebec. Its mandate is to invest in new
technology companies in order to move the Quebec economy into high-technology
industries. Innovatech has available to it an investment fund of
approximately $230 million. Mr. Byrne stated that Innovatech and Tirex have
discussed the possibility of expanding their relationship beyond Enviromax to
include the identification of other business opportunities which would involve
the use of recycled rubber crumb.