GreenMan Technologies Acquires Welch Products

Tire recycler GreenMan Technologies Inc., Des Moines, Iowa, has announced its acquisition of Welch Products Inc.

The Oct. 1, 2007, transaction was structured as a share exchange in which 100 percent of Welch Products’ common stock was exchanged for 8 million shares of GreenMan’s common stock. GreenMan has completed the acquisition of approximately 98 percent of Welch’s common stock and expects to acquire the remaining Welch common stock during the next few days.

Headquartered in Carlisle, Iowa, Welch Products specializes in design, product development and manufacturing of products using recycled materials, primarily recycled rubber. The company’s patented products and processes include playground safety tiles, roadside anti-vegetation products, construction molds and highway guard-rail rubber spacer blocks. Through its recent acquisition of Playtribe Inc., Welch also provides innovative playground design, equipment and installation. The company has been a major crumb rubber customer of GreenMan for the past several years.

For the last 12 months ended June 30, 2007, Welch Products and Playtribe had combined unaudited revenues of approximately $3.5 million. Based on customer interest and quote activity, GreenMan says it expects continued growth in the second half of calendar 2007 and significant growth in calendar 2008 when Welch’s EBITDA (earnings before interest, tax, depreciation and amortization) and net income are expected to be accretive.

Through the company’s National Safe Surface Initiative, Welch Products has created an emerging product line and unique patented marketing program focused on improving playground safety and accessibility, lowering playground maintenance costs and mitigating playground liability risks for schools, community and state parks and child care centers.

Welch and PlayTribe, a playground design, equipment and installation company, are pioneering a sales strategy that circumvents the traditional distributor channels and sells directly to the end customer.

Lyle Jensen, president and CEO of GreenMan Technologies, says, “Welch Products has developed strong brand names and high levels of customer satisfaction in the playground marketplace which supports a premium price point given the products’ compelling safety profile and endorsements by various public and private organizations. The marriage of GreenMan and Welch/Playtribe allows both companies to build on each other’s strengths and opens up a new billion dollar market.”

Welch Products’ Interim Chief Executive Officer & Managing Partner of First Continental Group (“FCG”), Bruce Boland says, “We feel this merger with GreenMan is based on a number of sound business decisions that match up the strengths of both companies and we are comfortable that Lyle Jensen can provide the necessary leadership to drive this next phase of our business model as we look to a stronger calendar 2008.”