H2O Innovation acquires two enterprises from Northeast US
by CM Staff
The company stated it expects this consolidation will foster synergies as the three companies will offer enhanced services with the intent to generate new business opportunities.
QUEBEC CITY — H2O Innovation Inc. has officially acquired JCO, Inc. and of Environmental Consultants, L.L.C. from arm’s-length third parties. Each of the Targets offers complete operation, maintenance and management services to municipal and industrial water and wastewater clients from the same region in the Hudson Valley Region in the State of New York.
According to a company statement, H2O Innovation, JCO and EC have a customer base of nearly 200. JCO and EC both operate industrial facilities. The company has stated that industrial streams are often more complex to treat.
The company also stated that it believes these acquisitions could lead to opportunities for H2O Innovation’s WTS business line to offer added value membrane solutions, and this could ultimately lower the operating expenses for the customers.
The company also stated it expects this consolidation will foster synergies as the three companies will offer enhanced services with the intent to generate new business opportunities. Additionally, JCO and EC operate numerous membrane plants that may benefit from the chemicals of H2O Innovation which allow membrane water treatment facilities to run longer without cleaning.
“These two O&M acquisitions are aligned with our 3-Year Strategic Plan,” said said Frédéric Dugré, President and Chief Executive Officer of H2O Innovation in a statement.
“We are welcoming with open arms an experienced team of approximately 120 employees within the H2O Innovation family bringing the total number of employees to nearly 915. Financially, both transactions are expected to be immediately accretive to H2O Innovation’s net earnings and EBITDA. On a pro-forma basis, these acquisitions are bringing the Corporation one step closer to its EBITDA target set in the 3-year Strategic Plan.”
The purchase price for these acquisitions cannot be disclosed for competitive reasons; however, the company has stated it will be satisfied from cash on hand, the recently amended credit facility and by the issuance of 1,107,733 H2O Innovation’s common shares at a price of $2.375 each.
A contingent consideration is payable twelve (12) months after closing subject to achievement of certain revenue objectives by each of the Targets.
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