CADIZ INC. ANNOUNCES AGREEMENT TO ACQUIRE WATER TREATMENT TECHNOLOGY COMPANY ATEC SYSTEMS
Acquisition of pioneering water tech firm accelerates Cadiz's growth as a leading-edge water solutions provider, and furthers its commitment to improving reliable access to clean and affordable water in California communities
LOS ANGELES, Oct. 25, 2022 /PRNewswire/ -- Cadiz Inc. (NASDAQ: CDZI, CDZIP) ("Cadiz," the "Company") today announced a definitive agreement to acquire ATEC Systems, Inc., ("ATEC"), a leading provider of technologically-advanced, cost-effective groundwater filtration systems for community, municipal, agricultural and industrial use.
We are proud to combine our expertise with ATEC in delivering innovative and affordable water solutions
Adding the ATEC business to the Cadiz portfolio diversifies its range of innovative, sustainable clean water solutions and expands Cadiz' mission to provide safe, affordable drinking water to underserved communities. The Company's flagship initiative is the Cadiz Water Conservation and Storage Project ("Cadiz Water Project"), which captures surplus groundwater before it evaporates in the desert and stores it underground. Cadiz will transport conserved and stored water to communities in Central and Southern California through a network of underground pipelines that once carried oil. Capturing, storing and transporting water underground saves billions of gallons of water from evaporation each year– enough to serve millions of homes in communities impacted by drought.
"We are proud to combine our expertise with ATEC in delivering innovative and affordable water solutions, particularly for small, rural and low-income communities without the financial resources to access to safe, reliable water supplies," said Susan Kennedy, Executive Chair of the Cadiz Board. "ATEC's technology and expertise in conjunction with our state-of-the-art conservation and conveyance technologies will help us deliver affordable clean water solutions to communities throughout and beyond California."
ATEC, a closely held firm based in Hollister, California, has produced water filtration systems since 1982. It initially pioneered technology to provide a cost-effective high-rate removal of iron, manganese and then expanded its reach to a full range of contaminants, including, arsenic, Chromium-6, nitrates, and other contaminants found in groundwater that pose serious health risks in drinking water.
Cadiz has been engaged in a strategic partnership with ATEC since 2015. The Company installed ATEC systems to test the removal of naturally occurring minerals for operation of the Cadiz Water Project and identified ATEC as the best in class, most cost-effective treatment technology for removing minerals from groundwater supplies.
There are more than 3,000 public water systems in California with 2 or more water quality violations per system and 78,000 groundwater wells operating in contaminated basins in California alone. More than 800 California community water systems are out of compliance with, at risk or consistently fail to meet primary drinking water standards. The California State Water Resources Control Board has estimated that the cost of curing this problem is more than $10B. ATEC can provide a cost-effective alternative to the treatment challenge.
"ATEC's strength is the versatility of its designs which can service both small and large systems through compact-footprint filter systems tailored to remove the specific contaminants in each groundwater basin," Kennedy added. "ATEC's highly efficient design and low operating costs makes it the most cost-effective solution on the market for both large municipal and small community water systems to address the growing threat of groundwater contamination in California and nationwide, including Chromium 6, nitrates, arsenic, industrial pollution and 'forever chemicals'."
ATEC has built more than 450 water filtration systems for cities, water districts, investor-owned utilities and small communities and businesses in 10 U.S. states, as well as Canada and Sri Lanka, with system treatment capacities up 60 million gallons per day (mgd). ATEC systems can be scaled in size to serve small, rural communities as well as larger municipalities, and require less maintenance and upkeep than traditional filtration systems.
The acquisition is expected to close this month. ATEC will retain its name and operate as a unit of Cadiz led by Lee Odell as the Chief Operating Officer. Odell is a leading water treatment engineer, who has been consulting for ATEC and previously led water quality divisions for large global engineering firms including Jacobs, CH2M and Montgomery Watson. He brings with him a first-hand knowledge of and experience with the ATEC technology and will lead an innovative effort to broaden the technologies' application to a full suite of groundwater contaminants, building on the success of the company's founder and principal owner, Dave Ketchum, who is retiring after a short transition period.
"Cadiz sees the potential for our treatment technology, and they have expressed a deep commitment to continuing our mission to provide a cost-effective and versatile treatment technology that can be customized to each customer's needs," Mr. Ketchum said.
"I look forward to joining forces with Cadiz, a longtime ATEC partner and fellow water-solutions innovator," Odell said. "Together, we will have the capability to serve more communities in more ways at a time of critical need."
Cadiz has launched several initiatives to provide clean water, technology, and water-conservation training to disadvantaged communities. In September, it signed an agreement with the Farmworkers Institute of Education & Leadership Development to build a state-of-the-art innovation center to provide work-based training for members of poor, minority communities. That followed an August agreement with the Salton Sea Authority and Torres Martinez Desert Cahuilla Indians to donate water, infrastructure financing, and water treatment technology to serve tribal communities and help remediate the impacts of evaporation at the Salton Sea. ATEC technology is being used to provide filtration systems at tribal wells to ensure safe drinking water on tribal lands.
Terms of the definitive agreement with ATEC were not disclosed. The acquisition will be completed with existing cash resources.
About Cadiz Inc.
Founded in 1983, Cadiz Inc. (NASDAQ: CDZI) is a California business with more than 70 square miles of property, significant infrastructure, and water rights. The Company's mission is to deliver sustainable solutions to California's clean water challenges. The Cadiz Water Conservation and Storage Project is an innovative aquifer storage project that will create a new water supply for 400,000 people a year by conserving billions of gallons of renewable groundwater currently being lost to evaporation and salt contamination at Mojave Desert dry lakes. With state-of-the-art groundwater management technology, the Project will put conserved water to beneficial use and create a much-needed groundwater bank interconnecting California's existing water infrastructure. For more information, please visit the Company's website www.cadizinc.com or review the Company's filings with the Securities and Exchange Commission.
FORWARD LOOKING STATEMENT: This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities of the Company. Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results or events to differ materially from those reflected in the Company's forward-looking statements include the Company's ability to maximize value for Cadiz land and water resources, the Company's ability to obtain new financing as needed, the receipt of additional permits for the water project and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.
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SOURCE Cadiz Inc.