Green Compliance will acquire Waterchem for an initial consideration of £5.534m which will be satisfied by the payment of £4.0m in cash, the issue of loan notes to the value of £533,919 and the issue of new ordinary shares to the value of £1m.

A further deferred consideration up to a maximum of £4.0m may be payable if Waterchem achieves specified profit targets for the year to the end of December.

Waterchem Limited is primarily engaged in the provision of water hygiene and water treatment services to facilities management companies, hospitals, universities and local authorities.

In addition Waterchem, through its wholly owned subsidiary Towerite, provides independent risk assessments as required to comply with the Approved Code of Practice for Legionella Control guidance provided by the Health and Safety Executive.

The Waterchem group reported revenue of £7.623m and profit before tax of £1.435m in the financial year ended 31 December 2009.

The acquisition will constitute a "reverse takeover" under the AIM Rules.

Story provided by Business Financial Newswire