FOR IMMEDIATE RELEASE
CARLISLE IOWA
CONTACT:
SHANNON GODWIN
515-333-4093
TUESDAY - OCTOBER 2nd
2007
GreenMan
Technologies Acquire Welch Products, Inc.
Acquisition
Leverages GreenMan's Crumb Rubber Manufacturing Capabilities and Creates
Vertically Integrated Products Subsidiary with Enhanced Growth Opportunity
GreenMan Technologies, Inc. (OTC BB:GMTI.OB - News), a leading recycler of
over 12 million scrap tires per year in the United States, today announced it
has acquired Welch Products, Inc.
The October 1, 2007 transaction was structured as a share exchange in which 100
percent of Welch Products' common stock will be exchanged for 8 million shares
of GreenMan's common stock. GreenMan has completed the acquisition of
approximately 98 percent of Welch's common stock and expects to acquire the
remaining Welch common stock over the next few days.
Headquartered in
Carlisle, Iowa, Welch Products specializes in design, product development, and
manufacturing of environmentally responsible products using recycled materials,
primarily recycled rubber. The company's patented products and processes
include playground safety tiles, roadside
anti-vegetation products, construction molds and highway guard-rail rubber
spacer blocks. Through its recent acquisition of Playtribe, Inc., Welch also provides
innovative playground design, equipment and installation. Welch Products has
been a major crumb rubber customer of GreenMan for the past several years.
For the trailing
twelve months ended June 30, 2007, Welch Products and Playtribe had combined
unaudited revenues of approximately $3.5 million. Based on customer interest
and quote activity, GreenMan expects continued growth in the second half of
calendar 2007 and significant growth in calendar 2008 when Welch's EBITDA
(earnings before interest, tax, depreciation and amortization) and net income
are expected to be accretive.
Through the
company's National Safe Surface Initiative®,
Welch Products has created an emerging product line and unique patented
marketing program focused on: (1) improving playground safety and
accessibility; (2) lowering playground maintenance costs; and (3) mitigating
playground liability risks for schools, community and state parks, and child
care centers. Welch's Duromat Extended Life(TM) playground safety tiles are
manufactured with a patented "cold-cure" process that allows high
quality crumb rubber tiles to have a unique long life, even in extreme hot and
cold temperatures. Additionally, a new market requirement created by the
American Disabilities Act ("ADA") requires schools and other public
playgrounds to provide all children access to outdoor play. Welch Products
believes that loose-fill
surfacing (e.g., wood chips, mulch, sand, and pea gravel) is rarely
maintained to proper safety levels and does not allow children in wheelchairs
or with other disabilities to easily use playground equipment. Welch Products'
playground tiles are fully-ADA compliant and, during independent tests
performed by the National Program for Playground Safety, demonstrated a 75
percent reduction in emergency room injuries given proper supervision.
The acquisition
of PlayTribe, Inc., an innovative playground design, equipment, and
installation company, provides playground equipment and recreational site amenities
that encourage safe and imaginative play. Welch and PlayTribe are pioneering a
unique, high-value-add sales strategy which circumvents the traditional
distributor channels and sells directly to the end customer. This strategy has
created enhanced customer satisfaction attributable to the companies'
comprehensive approach to providing an overall solution for compliance, safety,
accessibility, and turn-key quality installation.
Lyle Jensen,
President and Chief Executive Officer of GreenMan Technologies, states,
"Welch Products has developed strong brand names and high levels of customer
satisfaction in the playground marketplace with premium products'
compelling safety profile and endorsements by various public and private
organizations. The marriage of GreenMan and Welch/Playtribe allows both
companies to build on each other's strengths and opens up a new billion dollar
market."
Welch Products'
Interim Chief Executive Officer & Managing Partner of First Continental
Group ("FCG"), Bruce Boland commented, "Our Welch and FCG people
have spent a great deal of human and financial resources in developing the
Welch Overall Solutions® Project. The objective was to prove the value of
sustainable value-add products made from used rubber that put people to work,
provide safety for children, and prove to be a wise use of taxpayer dollars. We
believe the end-result of this merger will give the Iowa Legislature on both
sides of the aisle, the National Program for Playground Safety from Cedar
Falls, Iowa, and our hard working employees who designed and developed this
unique project within the borders of Iowa, the recognition they justly
deserve."
Mr. Boland
added, "We feel this merger with GreenMan is based on a number of sound
business decisions that match up the strengths of both companies and we are
comfortable that Lyle Jensen can provide the necessary leadership to drive this
next phase of our business model as we look to a stronger calendar 2008. In our
view, this adds up to a win-win for our customers, school children, bi-partisan
legislatures, and all shareholders going forward. We are very excited about the
future of the combined companies and will continue to help our combined
investment grow."
GreenMan Technologies pursues technological
processes and unique marketing programs to transform recycled materials into
renewable fuel, alternative energy, recycled feedstock, and innovative recycled
products. Over twelve million tires are collected and recycled annually into
tire-derived fuel, tire-derived aggregate, and crumb rubber feedstock for
playground, athletic track and field, and road surfacing. Through the company's
Welch Products subsidiary, the company develops and markets branded products and
services that provide schools and other political subdivisions viable solutions
for safety, compliance, and accessibility.
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