CONMAT TECHNOLOGIES, INC.

CONMAT TECHNOLOGIES, INC.

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Company Overview
The company, formerly known as Phoenix Systems, Inc., is engaged in the development and manufacture of proprietary custom engineered plastics and composite products for industrial end users with a special emphasis on the wastewater treatment marketplace. It was incorporated in 1986 and conducts its business from its registered head office located in Phoenixville, Pennsylvania, United States.
The company is primarily involved in manufacturing and selling clarifier components for wastewater treatment applications and other plastic-molded products, including buckets, sprockets, and bearings. It sells its products in the United States, as well as internationally in western Europe, the Middle East, Asia, and South America.
Business Summary
ConMat Technologies, Inc. (ConMat) is engaged in the development and manufacture of proprietary custom engineered plastics and composite products for industrial end users with a special emphasis on the wastewater treatment marketplace. ConMat conducts its operations through its wholly owned subsidiary, the Polychem Corporation. Polychem manufactures and sells clarifier components for wastewater treatment applications and other plastic-molded products, including buckets, sprockets and bearings. Subsequent to December 31, 2001, Polychem entered into an agreement to outsource all of its manufacturing operations. The wastewater treatment market is global in nature, and Polychem presently sells products internationally in Western Europe, the Middle East, Asia and South America, as well as in the United States.
Description and history
ConMat Technologies, Inc. (ConMat), incorporated in 1986, is engaged in the development and manufacture of proprietary custom engineered plastics and composite products for industrial end users with a special emphasis on the wastewater treatment marketplace. ConMat conducts its operations through its wholly owned subsidiary, the Polychem Corporation. Polychem manufactures and sells clarifier components for wastewater treatment applications and other plastic-molded products, including buckets, sprockets and bearings. Subsequent to December 31, 2001, Polychem entered into an agreement to outsource all of its manufacturing operations. The wastewater treatment market is global in nature, and Polychem presently sells products internationally in Western Europe, the Middle East, Asia and South America, as well as in the United States.

Polychem’s primary products include complete non-metallic rectangular clarifier component systems for water and wastewater treatment operations. Polychem’s clarifier component systems are primarily used for the removal of sediment and solids from wastewater. The clarifier systems are, in effect, settling tanks through which water passes, allowing suspended solids to settle. These systems are comprised of non-metallic chain, sprockets, stub shafts, wear shoes and other products fabricated to customer specifications. The majority of the balance of Polychem’s products is produced for use in a complete system of wastewater treatment clarifier equipment that Polychem sells to its customers. Such a complete system is usually built to customer specifications and sold under an order selected from competitive bids. The “reaction injection molded” nylon products and the injected molded products account for between 80% and 90% of Polychem’s sales; compression molded products comprise the balance of the business. The average life expectancy of Polychem’s typical products is ten years. The cost of Polychem’s systems varies based on the scope of the system and the end user modifications required. In addition to its existing products, Polychem continues to explore new product applications. Polychem currently has two wastewater treatment products in the feasibility study stage.

Polychem provides quotes to contractors for components for approximately 400 wastewater treatment projects each year. Project contracts typically are awarded on a competitive bid basis. Historically, Polychem products are used in approximately 25% of the projects for which Polychem provides quotes. Polychem does not bid directly for new projects, but rather supplies its products to a contracting engineer, who in turn bids for new projects. Polychem bids directly for replacement products. Of the approximately 400 bids submitted annually, approximately 50% are for replacement parts and 50% are new projects. New projects account for approximately 60% of Polychem’s revenues.

On March 20, 2002, ConMat entered into a License and Asset Purchase Agreement (the License and Asset Purchase Agreement) with Polychem and Ecesis LLC, a business owned by former Polychem management (Ecesis), which provides for the sale of Polychem’s specialty and water treatment product lines to Ecesis (the Sale). ConMat anticipates holding a special meeting of its shareholders in the near future at which its shareholders will vote whether to approve the Sale and a Plan of Liquidation for the remaining assets of Polychem (the Liquidation).

Pending the approval of the Sale by ConMat’s shareholders, pursuant to the License and Asset Purchase Agreement, Polychem has licensed its specialty and water treatment product lines to Ecesis in exchange for all profits generated from sales. In the event that the Sale is not approved by ConMat’s shareholders, the license will terminate and Polychem will resume developing and marketing its product lines.

If ConMat’s shareholders approve the Sale and Liquidation, ConMat will have no assets (other than cash, if any, remaining after satisfaction of its and Polychem’s liabilities). In such event, the Board of Directors of ConMat will seek to acquire an interest in one or more suitable operating businesses, which may include assets or shares of another entity to be acquired by ConMat directly or through a subsidiary, that the Board of Directors believes will be profitable to ConMat and its shareholders.

In the event the Sale is not approved, ConMat’s long-term goals for Polychem include solidifying Polychem’s reputation as a provider of quality wastewater treatment equipment products; increasing sales of its traditional products by improving existing product lines; and seeking new wastewater treatment products to supplement its current line.

Formerly known as Phoenix Systems, Inc

Business Line
Engaged in the development and manufacture of proprietary custom engineered plastics and composite products for industrial end users with a special emphasis on the wastewater treatment marketplace
Subsidiary

Advisor
COGEN- SKLAR- LEVICK & CO.
IPO date

US SIC Code
3089
Company Address
Franklin Avenue and Grant Street

City province or state postal code
19460, PHOENIXVILLE, PA
Phone: +1 610 935 0225
Fax: +1 610 935 7151
Country address: UNITED STATES OF AMERICA
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