Water Intelligence PLC Reacquisition of Minneapolis, Minnesota Franchise (5587M)
12 Mayo 2020 - 01:00AM
UK Regulatory
TIDMWATR
RNS Number : 5587M
Water Intelligence PLC
12 May 2020
Water Intelligence plc
Reacquisition of Minneapolis, Minnesota 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 the
reacquisition of its Minneapolis, Minnesota franchise
("Minneapolis") within the Group's American Leak Detection
subsidiary ("ALD").
Minneapolis is a significant reacquisition that enables the
Group to add further scale to Water Intelligence, both
operationally and financially. The acquisition is accretive to
shareholder value and builds on a long-term growth strategy that
over the last five years has produced compounded annual growth of
35% in terms of revenue and 33% in terms of profit before
taxes.
Operationally, the Group seeks to reinforce ALD's brand
leadership across the United States. ALD operates in 46 states of
the United States and generates over $125 million in sales to third
parties. Its solutions are delivered by franchise locations and
corporate locations operating under the same brand.
Franchise reacquisitions in strategic locations facilitate the
Group's ability to grow regional geographies faster through more
centralized marketing and management. Operationally, the
reacquisition of Minneapolis creates a corporate base in the Upper
Midwest region of the United States. The current franchise team
will be staying in place to grow the business faster with
additional working capital. Minneapolis also provides the Group a
regional hub to cross-sell solutions from its UK-based municipal
business to ALD's customers. During 2019, the Group executed
several significant municipal contracts in the Upper Midwest.
Financially, for full-year 2019, Minneapolis generated
approximately $985,000 of sales and $315,000 of pre-tax profits.
Through Q1, the team in Minneapolis has successfully navigated the
Covid-19 crisis and is on-track to produce similar strong results
in 2020 for the Group's P&L. As noted in our recent Q1 Update,
demand for the ALD's water and wastewater infrastructure services
remains strong in that such solutions are considered "essential
services" as homeowners "shelter-in-place." The purchase price for
the reacquisition which includes all assets to conduct operations
(trucks, equipment etc.) is approximately $1.3 million to be paid
evenly over four years.
Commenting on the Group's performance, Executive Chairman, Dr.
Patrick DeSouza remarked: "We seek to distinguish ourselves among
companies operating in the Covid-19 marketplace. We plan to
accelerate our growth plans during Q2 given our success in
navigating during Q1. Global market demand for solutions to water
loss from leakage and to health issues from failing wastewater
infrastructure is strong and continues to grow.
We are continuing to execute our proven growth plan of (i)
gaining national accounts to scale our sales footprint, (ii)
reacquiring franchises selectively to add operational and financial
scale and (iii) introducing new technology-based products to
leverage our market-making capabilities. We look forward to working
more closely with the team in Minneapolis to realize accelerated
growth.
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
Adrian Hargrave, VP Corporate Development + 44 (0) 7775 701 838
WH Ireland Limited - NOMAD & Broker Tel: +44 (0) 207 220 1666
Adrian Hadden
James Sinclair-Ford
Matthew Chan Tel: +44 (0) 3903 7721
Dowgate Capital Ltd - Broker &
Advisor
Stephen Norcross
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END
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