Xylem acquires Pure Technologies
Major water technology company Xylem has entered into a definitive agreement to acquire all the issued and outstanding shares of Pure Technologies. The transaction has been unanimously approved by Pure’s board of directors, who now recommend the company’s shareholders vote in favour of the transaction.
The agreement will see Xylem acquire all issued and outstanding shares for CAD $9.00 per share in cash, representing an enterprise value of CAD $509 million, or USD$397 million (€336 million).
Pure provides diagnostic and analytics solutions and services based on proprietary technologies. These technologies, such as intelligent leak detection systems, are designed to address issues in the water and wastewater infrastructure sectors.
“Aging infrastructure is a top concern of water utilities around the world, and infrastructure assessment is an attractive, growing market that directly addresses this challenge in a cost-effective way,” said Patrick Decker, Xylem President and Chief Executive Officer.
“Pure’s solutions strongly complement the broader Xylem portfolio, particularly our recently acquired Visenti and Sensus solutions, creating a unique and disruptive platform of diagnostic, analytics and optimisation solutions for clean and wastewater networks. Pure will also bring greater scale to our growing data analytics and software-as-a-service capabilities. As one company, we will provide customers with even more powerful and innovative solutions enabled by cutting-edge technologies.”
Earlier in 2017, the two companies entered into an exclusive commercial partnership which sees Xylem represent Pure’s products and services in the Middle East, Southeast Asia and India.
According to a statement announcing the deal, Pure reported consolidated revenue of CAD$126 million and CAD$21 million in adjusted earnings before interest, taxes, depreciation and amortisation for the year ending 30 September 2017. Xylem, meanwhile, expects to achieve at least $12 million in annual cost synergies within two years of closing, including elimination of redundant public company costs, and procurement and footprint consolidation opportunities.
Xylem will pay for the transaction with cash and low interest, short-term debt. The transaction is subject to various customary closing conditions, including receipt of Canadian Court, Pure shareholders’ and regulatory approval under the Hart-Scott-Rodino Act (United States). It is expected to close in the first quarter of 2018.
