EDY Eddy Smart Home Solutions Ltd

Acquisition Further Strengthens its Position as North America's Leading Water Management Company

TORONTO, March 25, 2022 /CNW/ - Eddy Smart Home Solutions Ltd. ("Eddy") (TSXV: EDY) is pleased to announce it entered into a definitive agreement on March 24, 2022 (the "Agreement") for the acquisition (the "Transaction") of all of the issued and outstanding common shares of Reed Controls Inc. (dba Reed Water) ("Reed"). Closing of the transaction remains subject to approval by the TSX Venture Exchange (the "TSXV") and other customary closing conditions.

Pursuant to the Agreement, the total purchase price for the Transaction will be C$7,359,600. The total consideration (the "Share Consideration") will be paid in common shares of Eddy at a per share price of $0.60 per share with an estimated 12,266,000 shares being issued. The Share Consideration will be subject to a twenty-four (24) month lock-up period, provided that the Share Consideration will be released from the lock-up requirements on the first business day following each of the four, six, nine, twelve, fifteen, eighteen and twenty-one month anniversaries of the closing date, and such other terms, as may be imposed by the TSXV. The Share Consideration will also be subject to a statutory four month hold period.

Upon closing of the Transaction, Reed's founders Avi Yurman and Adam Bartman will join Eddy's leadership team, and Chief Marketing Officer Avishai Moscovich will join the Sales and Marketing team in a senior role as VP of Business Development. Reed has also been granted a right to nominate a director to serve on Eddy's board of directors (the "Board"), and Avi Yurman will be appointed as a Board observer.

Reed developed a robust water management technology platform of hardware & cloud software to manage water related risk, conserve water & accelerate IoT adoption among global plumbing manufacturers.  Together with Eddy, the technology will further enhance the solutions, creating a unified view of the entire water infrastructure in commercial & high-rise buildings. As a result of the Transaction, Eddy expects to be positioned for expansion throughout North America, protecting asset owners and insurance providers from catastrophic leak events, the single biggest risk to these properties.

"Reed's commercial focus in high-rise buildings fits perfectly into our strategic direction and overall vision to become the global leader in water management. Reed has done an incredible job growing its business to this point with a revenue CAGR of 65% over the past 3 years and with gross margin of ~ 50%.  As part of this transaction Reed brings in recurring revenue associated with their current customer base and ~ $2mm in purchase orders with the same margin profile. Reed's customer base and product suite is complimentary and additive to ours and the Reed leadership team will boost our overall management bench strength as Eddy continues to grow,", said Travis Allan, CEO & President of Eddy. 

"The powerful combination of industry experts and complimentary products will further solidify Eddy as the best-in-class market leader, while providing our customers with the most agile, scalable and robust platform available to better control and conserve water in both commercial and residential properties," said Adam Bartman, Co-founder and Solution Architect of Reed.

The Transaction is an arm's length transaction that is expected to constitute an "expedited acquisition" pursuant to Policy 5.3 of the TSXV. Subject to the satisfaction of such conditions, the Transaction is expected to close within the next 45 days.

Eddy is a North American provider and developer of residential and commercial smart water metering products and monitoring services, helping property owners protect, control, and conserve water usage by combining water sensing devices with behavioural learning software. For more details on Eddy's products or company information, please visit eddysolutions.com.

Investors are cautioned that any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Forward-looking information in this press release incudes statements with respect to Eddy's ability to complete the Transaction on the terms and timing described herein, or at all; the ability of Eddy to obtain the necessary approval of the TSXV; the proposed Board nominee of Reed; and the anticipated effects of the completion of the Transaction on Eddy and its strategic direction. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including: the risk that Eddy and Reed are unable to complete the Transaction on the terms and timing described herein, or at all; Eddy's inability to obtain approval from the TSXV; the Transaction not having the anticipated beneficial effects on Eddy and its strategic direction; and the risk factors discussed in the Company's filing statement which are incorporated herein by reference and are available through SEDAR at www.sedar.com. The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE Eddy Solutions