Flow Calls Off Merger with Omax

Flow International, a developer and manufacturer of industrial waterjet machines, called off a long-delayed merger with competing waterjet manufacturer Omax after twice revising an offer.

"After a thorough review of our financing alternative, and discussions with Omax about modifying the terms of the transaction, we have decided that acquiring the company would be excessively dilutive to Flow shareholders,” said Flow CEO Charley Brown.

Omax will receive a $35 million payment from Flow to cancel the merger obligation and also to settle patent litigation pending between the two companies for five years.

Flow and Omax agreed, back in March 2009, to amend the terms of their merger agreement, changing Flow’s opportunity to acquire Omax from an obligation to an option exercisable by Flow, and agreeing to a release of merger related litigation if the acquisition did not close. Flow anticipates charges consistent with its previous disclosures in connection with its decision not to complete the transaction.

Brown said that in the past two months Flow pursued financing alternatives to close the merger and has “repeatedly gone back to the negotiating table attempting to lower the price of the deal.”

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