Energy Recovery Inc. to Acquire Pump Engineering
Energy Recovery, Inc. (ERI) has entered into a definitive agreement to acquire all of the equity interests of Pump Engineering, L.L.C. based in New Boston, Mich.
Under the terms of the agreement, ERI will pay the shareholders of Pump Engineering approximately $20 million in cash plus one million shares of ERI Common Stock. The completion of the transaction, which is subject to satisfaction of customary conditions, is expected to take place in the fourth quarter of 2009.
Pump Engineering is a leading provider of centrifugal turbine energy-saving technology for seawater and brackish desalination applications and has demonstrated support for emerging markets such as natural gas and high pressure fluid processing. The company’s hydraulic turbochargers and pumps are custom-designed to reduce energy consumption and increase efficiency in specific process conditions.
“ERI’s acquisition of Pump Engineering is aligned with our growth strategy of expanding our product offerings and addressing potential new markets. It allows ERI to offer our clients multiple complementary technologies that are unmatched in the industry,” said ERI President and CEO G.G. Pique. “This acquisition underscores ERI’s commitment to lead a global effort to prove that desalination is an affordable, environmentally sound and energy-efficient answer to the growing water crisis.”
Pump Engineering’s turbine technology can be applied to new and substantially larger addressable markets outside of the water treatment markets such as natural gas and other high pressure fluid processes. Similar to the desalination process, these markets also have high-pressure streams where significant energy can be saved; however, they are very sensitive to cross-contamination. The turbine design provides 100 percent isolation of the process streams making it a good fit for these future applications.
Pump Engineering's unaudited financial statements for its 2008 fiscal year ended December 31 show that the company generated $9.3 million in revenue and produced an operating margin of 10 percent.