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Publish Date : 01-Aug-2012

ADA-ES Inc., today announced that it has signed a definitive agreement under which a newly formed, wholly owned subsidiary of ADA will acquire and operate the assets of Bulk Conveyor Specialist Inc., a leading privately held fabricator and supplier of Dry Sorbent Injection (“DSI”) systems and other material handling equipment, and Bulk Conveyor Services, Inc., which provides testing and related services.

The purchase agreement provides for ADA to acquire BCSI for an initial payment of $2.0 million in cash, and an additional $3.0 million payable over the next five years. The transaction is expected to close near the end of August 2012, subject to customary and certain other conditions.

BCSI has approximately 50 employees and 175,000 square feet of fabrication and office space in McKeesport, Pennsylvania. BCSI is a U.S.-leading supplier of commercial DSI systems to the coal-fired power generation industry. DSI systems are used to control acid gas emissions. BCSI manufactures an array of bulk material handling equipment and systems, including conveyors, control panels, stationary and portable storage silos, feeders, and grit removal systems.

The U.S. Environmental Protection Agency’s Mercury and Air Toxics Standard (“MATS”) mandates reductions in acid gas emissions at coal-fired power plants around the country and is expected to create a new $500 million market for DSI systems. This acquisition provides ADA with significant capacity, experience and resources to provide customers with the proven, reliable solutions they expect and need for emissions compliance. BCSI’s manufacturing facility will also allow ADA to expand its capacity for supplying Activated Carbon Injection (“ACI”) systems, a market in which the Company has historically captured over 30% market share.

Sales of DSI and ACI systems are expected to generate over $300 million in revenues for ADA over the next three years.

Dr. Michael Durham, President and CEO of ADA, stated, “We are very pleased to announce this step to vertically integrate portions of our equipment supply business. Our new subsidiary, which will retain the BCSI name, will allow us to further advance our innovative, patent-pending, DSI process by marrying it with BSCI’s successful, proven design. BCSI capabilities will enhance not only our DSI business, but will provide new manufacturing and supply chain options for ADA’s portfolio of emission control solutions and open markets that we are currently not serving. With this acquisition, we are more confident of our ability to be a market leader in both the ACI and DSI markets.”

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