China Water and Drinks Inc. Acquires Majority Stake in Guangzhou Grand Canyon Distilled Water Co., Ltd. For $19.1 Million
China Water and Drinks Inc. (OTCBB: CWDK) (“China Water”) and Heckmann Corporation of Palm Desert, California (NYSE: HEK, HEK.U, HEK.WS) (“Heckmann”) announced today that China Water has acquired 67% ownership of Guangzhou Grand Canyon Distilled Water Co., Ltd. (“Grand Canyon”), a leading producer and distributor of pure distilled and mineral bottled water in China, for an aggregate purchase price of approximately $19.1 million in cash.
Founded in 1994, Grand Canyon is one of the leading brands of pure distilled and mineral bottled water in Southern China. In 2007, Grand Canyon generated revenue of approximately $19.0 million and net income of $3.9 million. In the first quarter of 2008, Grand Canyon’s revenue increased 44% to $5.2 million, versus $3.6 million in the first quarter of 2007. Net income in the first quarter of 2008 was $1.3 million, an increase of 86% from $0.7 million in the first quarter of 2007. The first quarter is generally the seasonally slowest quarter of the year.
China Water also announced today that Mr. Xu Hongbin, the current Founder, Chairman and President of China Water, has assumed the additional role of Chief Executive Officer.
“Mr. Xu Hongbin has been with China Water since its inception, and we are very pleased to have him take on the additional role of CEO,” stated Dick Heckmann, Chairman and CEO of Heckmann Corporation. “We had previously announced that Mr. Xu Hongbin would become CEO of China Water and Drinks, which will be a wholly-owned subsidiary of Heckmann Corporation upon consummation of the transaction, and thus we are confident in his abilities to assume this new role.”
On May 20, 2008, Heckmann and China Water announced that they had signed a definitive agreement under which Heckmann would acquire China Water, a leading producer and distributor of bottled water in China. The closing of the transaction is subject to customary closing conditions, including approval of the acquisition agreement by the stockholders of both companies. The transaction is expected to close in the fall of 2008. Interested stockholders and investors can currently access additional information from Heckmann’s preliminary proxy statement and prospectus, and when available, the definitive proxy statement, filed with the Securities and Exchange Commission on the SEC’s web site at www.sec.gov.
About China Water and Drinks
China Water and Drinks Inc. is a leading producer and distributor of bottled water in China. Through its production facilities in Guangzhou, Zhanjiang, Feixian, Changchun, Nanning and Shenyang, the Company produces and distributes bottled water to fourteen provinces and regions in China. The Company markets its own product under the brand “Darcunk”, supplies purified water to both local and international beverage brands such as Coca-Cola and Uni-President and provides private label bottled water for companies such as Sands Casino, Macau. More information is available at the company’s website (www.cwnd.net).
About Heckmann Corporation
Heckmann Corporation is a blank check company formed for the purpose of acquiring or acquiring control of one or more operating businesses through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction or other similar business combination. The Company completed its initial public offering of 54.1 million units at $8.00 per unit on November 16, 2007, generating gross proceeds of approximately $432.9 million dollars. Each unit was comprised of one share of common stock and one warrant exercisable at $6.00 per share. On November 20, 2007, the warrants began separately trading. As of March 31, 2008, the Company held approximately $429.2 million in a trust account maintained by an independent trustee, which will be released to and utilized by the Company in conjunction with the consummation of the proposed business combination with China Water. More information is available at the company’s website (www.heckmanncorp.com).
Risks and Uncertainties; Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements related to the benefits of the referenced transactions, the future financial performance of the surviving entity, the growth of the market for bottled water in China, expansion plans and opportunities, plans to increase production capacity, pending and future acquisitions by the surviving entity, and consolidation of the market for bottled water in China generally.
These forward-looking statements are based on information available to Heckmann and China Water as of the date of this release and current expectations, forecasts and assumptions and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Heckmann’s or China Water’s views as of any subsequent date and neither undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made.
Information concerning risks, uncertainties, and additional factors that could cause results to differ materially from those projected in the forward-looking statements is contained in Heckmann’s Preliminary Proxy Statement filed with the Securities and Exchange Commission on June 16, 2008, Heckmann’s Annual Report on Form 10-K as filed on March 31, 2008, as well as Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other of Heckmann’s SEC filings, and China Water’s Annual Report on Form 10-K as filed with the SEC on May 1, 2008, and its amended Annual Report on Form 10-K/A filed June 6, 2008, as well as Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other of China Water’s SEC filings.