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RNS Number : 1200U Water Intelligence PLC 01 December 2021
Reacquisition of South Oregon Franchise
Water Intelligence plc (AIM: WATR.L) ("Water Intelligence" or "Group"), a
leading multinational provider of precision, minimally-invasive leak detection
and remediation solutions for both potable and non-potable water is pleased to
announce that it has reacquired its South Oregon franchise (the "Acquisition")
within the Group's American Leak Detection subsidiary ("ALD"). Today's
acquisition accelerates the Group's strong growth trajectory by adding scale
to its regional hub of corporate operations in the northwest United States; a
territory where green economy solutions are in high demand.
Key terms of the Acquisition
The purchase price of $1.38 million in cash will be paid over the next twelve
months and includes all assets required to conduct operations, including
trucks and equipment. The purchase price is based on a pro forma revenue of
$1.15 million and $0.25 million in profit before tax for full year 2021. The
territory had $0.25 million in gross assets as of 31 October 2021. The
acquisition will be earnings accretive for Water Intelligence shareholders.
Strategic rationale for the Acquisition
The Acquisition reinforces the Group's strategy of establishing regional
corporate hubs in the US with scale to accelerate growth in nearby corporate
and franchise locations. With respect to the Northwest, the growth objectives
for the regional hub were announced with the acquisition of the Seattle
franchise in January 2021: (i) integrate corporate operations to the south
with Portland, Oregon and add efficiencies of scale; (ii) open a new corporate
location in Vancouver, Canada to the north; and (iii) open the US headquarters
for UK-based Water Intelligence International to deliver a broader range of
municipal solutions to take advantage of the expected increase in
infrastructure spending.
The Group is on-track with meeting these objectives and with today's
acquisition of South Oregon, expects to advance them further by: (i)
increasing operating efficiencies by extending Portland's operations further
south; (ii) integrating a South Oregon franchise team that has worked
seamlessly with the Seattle and Portland operations for many years; and (iii)
leveraging the expertise of the franchise owner, who has significant
experience with municipal solutions and is staying on as a corporate
manager. The franchise owner will, in due course, be granted options for
10,000 shares at a premium to the prevailing share price at the time of the
grant (to be not less than the recent placing price of 1200p) and have a
four-year vesting period, consistent with recent franchise reacquisitions.
With increased corporate presence in the Northwest, the Group also plans to
launch a regional training center for the Western part of the United States.
The training center would enable the Group to add more trained technicians for
both corporate and franchise stores to capture ever-increasing market demand
as the price of water increases due to drought conditions and issues of
climate change in the Western U.S.
Executive Chairman, Dr. Patrick DeSouza commented: "I am very pleased with
today's acquisition, which builds on our recent fundraising and acquisitions
over the last few years. We are integrating a strong team with our growing
corporate operations in the northwest United States; the team will contribute
significantly to our upward trajectory. Market demand for water infrastructure
and green economy solutions is especially strong in the northwest United
States and growth has accelerated despite Covid-related issues because water
infrastructure is deemed to be 'an essential service'. We take it as our
mission to deliver minimally invasive solutions everywhere to preserve the
world's most precious resource."
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014
Enquiries:
Water Intelligence plc
Patrick DeSouza, Executive Chairman Tel: +1 203 654 5426
RBC Capital Markets - Joint Broker Tel: +44 (0)20 7653 4000
Jill Li
Elizabeth Evans
WH Ireland Limited - NOMAD & Joint Broker Tel: +44 (0)20 7220 1666
Adrian Hadden
Ben Good
Tel: +44 (0)7920 599 793
Dowgate Capital Ltd - Joint Broker
Stephen Norcross
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