News Release
FOR RELEASE JUNE 1, 1998 AT 7:30 AM EDT
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Contact: Matt Clawson (investors) or Paul J. Catuna
Owen Daley (media) Vice President, Finance
Allen & Caron, Inc Isonics Corporation
(714) 252-8440 (408) 260-0155
ISONICS CORPORATION ANNOUNCES IT HAS AGREED
TO ACQUIRE CHEMOTRADE GMBH
SAN JOSE, CA (June 1, 1998) . . . Isonics Corporation (OTC: ISON) announced
today that it has signed a definitive agreement to acquire Dusseldorf,
Germany-based Chemotrade GmbH, a privately held company that supplies both
stable and radioactive isotopes to customers world-wide. In business since 1990,
Chemotrade had sales of over $7 million for its fiscal year ended December 31,
1997 and has been profitable since its first year of operation.
Isonics has agreed to pay approximately $3.6 million in a combination of cash,
notes, and restricted Isonics common stock. A substantial portion of the
purchase price is contingent upon the future performance of Chemotrade. The
number of shares of Isonics stock to be issued will be based upon the average
closing price of Isonics stock for the 10 trading days preceding and 5 trading
days following the signing. The transaction is expected to close before the end
of August, subject to the completion of due diligence and other closing
conditions. Chemotrade will operate as a wholly owned subsidiary with existing
management remaining in place.
Isonics President & CEO James E. Alexander commented, "Chemotrade primarily
markets isotopes and related products that are not competitive with Isonics
products, so their revenues and profits will be completely incremental. The
acquisition of Chemotrade also opens the European market and provides access to
key customers for Isonics products. While Chemotrade has several supply
relationships for their radioisotope products in the United States, we believe
we can help them dramatically expand their North American market share."
"Chemotrade's expertise in radioisotopes provides Isonics a new opportunity with
a large potential upside." Alexander added, "They now supply Iodine-125, which
is used in surgical implants to treat prostate cancer. Chemotrade management is
considering strategies related to manufacturing the actual radioactive `seeds'
as well as developing other brachytherapy products in partnership with medical
device companies."
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4010 Moorpark Ave. Suite 119 o San Jose CA 95117
(408) 260-0155 o Fax (408) 260-2110
ISONICS CORPORATION TO ACQUIRE CHEMOTRADE GMBH
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Chemotrade was co-founded and is managed by Herbert Hegener and Helmut Swyen.
According to Swyen, "During the structuring of this deal, we have come to know
Isonics management personnel and appreciate their overall corporate growth
strategy. The strategic fit between our companies is excellent.
"Isonics' access to technology, obtained through its joint venture with the
Institute of Stable Isotopes in Tblisi, Georgia, combines well with the German
government's economic development programs for creating high technology jobs in
the former East Germany" he said. "It also provides an outstanding opportunity
for creating the only `domestic' source of the stable isotope Carbon-13 for the
emerging European diagnostic breath test market."
Isonics is a specialty chemical and advanced materials company which develops
and commercializes products based on enriched stable isotopes. Stable isotopes
can be thought of as ultra-ultra pure materials. This high degree of
purification provides enhanced performance properties compared to normal
materials. Stable isotopes have commercial uses in several areas, including
energy; research, medical diagnostics, and drug development; product tagging and
stewardship; semiconductors; lasers; and optical materials.
Except for historical information contained herein, this document contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements involve known and unknown risks
and uncertainties that may cause the Company's actual results or outcomes to be
materially different from those anticipated and discussed herein, including the
risk that the acquisition may not close due to a variety of reasons and the
risks inherent in acquiring a company in Chemotrade's industry, and the risk
that future business and technology acquisitions may not occur for a variety of
reasons, including the unavailability of financing. Further, the Company
operates in industries where securities values may be volatile and may be
influenced by regulatory and other factors beyond the Company's control.
Important factors that the Company believes might cause such differences are
discussed in the risk factors detailed in the Company's Prospectus, dated
September 22, 1997, and its recent 10-QSB's filed with the Securities and
Exchange Commission. In assessing forward-looking statements contained herein,
readers are urged to carefully read all cautionary statements contained in those
filings with the Securities and Exchange Commission.
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