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ENRON UNIT TO PURCHASE MINORITY INTEREST IN CATALYTICA COMBUSTION SYSTEMS, INC.
FOR IMMEDIATE RELEASE: Tuesday, December 9, 1997
HOUSTON - Enron Ventures Corp., a wholly-owned subsidiary of Enron Corp. (NYSE: ENE), and Catalytica Combustion Systems, Inc., a subsidiary of Catalytica, Inc. (Nasdaq: CTAL), announced today that Enron Ventures (EVC) will purchase a 15 percent minority interest in Catalytica Combustion Systems (CCSI) for $30 million in cash. Enron will also receive a three-year option to purchase an additional 5 percent of CCSI for $14.4 million in cash.
CCSI's breakthrough technology, the XONON(TM) Combustion System, limits the formation of nitrogen oxides (NOx) and other harmful emissions generated from the combustion of fossil fuels in gas turbines. Results to date have shown that XONON will enable gas turbines to meet the most stringent air emissions requirements throughout the world. XONON systems will be available to gas turbine manufacturers for new production, as well as for owners of installed gas turbines.
"The central thrust of Enron's vision is the creation of clean energy solutions, so the XONON technology represents an excellent strategic fit," said Thomas E. White, EVC's Chairman and CEO. "CCSI's ultra-low NOx combustion technology has the potential to improve the emissions profiles of a wide range of gas turbines. We believe XONON will facilitate the permitting of gas turbines in power stations and distributed power applications, as well as enhance power generation operating flexibility and reliability. The XONON technology will contribute to the growth of gas turbine power generation and simultaneously to the reduction in global emissions, currently the subject of intense discussion among world leaders. Moreover, this investment will allow CCSI to take full advantage of Enron's broad position in the energy sector to open new markets quickly for XONON systems."
"We welcome Enron, an innovative energy industry leader, as a strategic investor and shareholder," said Dennis A. Orwig, President and CEO of Catalytica Combustion Systems. "Their investment is a further demonstration of the industry's confidence in our XONON technology; and it recognizes the enabling impact which XONON may have on the global power market's search for more efficient production of clean energy. In addition, we believe that working with Enron, a large purchaser and knowledgeable operator of turbines, will be a major advantage as we pursue growth opportunities in both the original equipment and retrofit market segments."
According to Catalytica, Inc. President and CEO Ricardo Levy, the new relationship with Enron is an important piece of the company's plans to accelerate commercial development of XONON in 1998, and to provide a financial and commercial platform for the long-term growth and profitability of the parent company, Catalytica, Inc. "The increase in strength of Catalytica Combustion Systems reinforces the financial position of the entire company, including our healthcare industry subsidiary, Catalytica Pharmaceuticals," Levy said. "Together, our two principal subsidiaries reinforce each other's success and give us greater freedom to pursue strong new partnerships on both sides of our business, such as this new relationship with Enron."
The transaction with Enron is expected to be completed in January 1998, subject to the satisfaction of certain closing conditions including filings under the Hart-Scott-Rodino Antitrust Improvements Act.
Catalytica, Inc., through its subsidiaries, develops and produces advanced products that use proprietary catalytic technologies to economically solve environmental problems. Catalytica Combustion Systems, Inc., a majority-owned subsidiary, manufactures and markets the XONON Combustion System, which is the ultra-low NOx solution for gas turbines. Catalytica Pharmaceuticals, Inc., a majority-owned subsidiary, provides process development, formulation development and manufacturing for business partners in the pharmaceutical and biotech industry. Find Catalytica on the World Wide Web at www.catalytica-inc.com.
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $23 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest marketer of natural gas and electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns and manages operating power plants and natural gas pipelines around the world; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind energy worldwide. Enron's Internet address is www.enron.com and its common stock is traded under the ticker symbol, "ENE."
This news release contains forward looking statements regarding the transaction with Enron, the development and commercial introduction of the XONON system and CCSI's ability to accelerate such development and commercial introduction, and the impact of the Enron investment and other investments on the Company's business development. These statements involve risks and uncertainty, including without limitation the ability of CCSI to complete technical development of XONON and introduce and achieve market acceptance of the XONON system, the ability of CCSI to successfully achieve sustained market growth, changes in environmental regulations and competition. Investors are encouraged to review Catalytica's Form 10-K/A for the year ended December 31, 1996 (Part II, Item 7) and the Form 10-Q for the period ended September 30, 1997, for a discussion of additional factors that could affect Catalytica's and CCSI's future performance. XONON is a trademark of Catalytica Combustion Systems, Inc.
For additional information please contact:
Karen Denne - Enron
(713) 853-9757
kdenne@enron.com
Lloyd Baylis - Catalytica, Inc.
(650) 960-3000
lnb@mv.catalytica-inc.com
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