Canadian Underground Infrastructure Logo

Aegion acquires Underground Solutions for $85 million

Aegion acquires Underground Solutions for $85 million

Aegion has executed a definitive agreement to acquire Underground Solutions, Inc. for $85 million in cash and expects to close the transaction during the first quarter of 2016. The Company will separately pay for the discounted value of tax benefits (estimated today to be approximately $5 million) associated with Underground Solutions' net operating loss carry forwards at closing. Aegion will fund a substantial portion of the purchase price with existing cash and the remainder from borrowings against the Company's line of credit. Aegion expects the transaction to be accretive to 2016 GAAP earnings per share with revenues of approximately $50 million and operating margins in excess of 10 percent. Several key members of Underground Solutions' senior management, who average more than 20 years of industry experience, will join Aegion to form an expanded team dedicated to trenchless rehabilitation of existing pressure pipelines.

Underground Solutions' patented fusible polyvinyl chloride ("PVC") products focus on the rehabilitation of pressure pipelines, primarily in North America. Underground Solutions uniquely complements Infrastructure Solutions' existing pressure pipe rehabilitation technologies InsituMain, InsituGuard and Tyfo/Fibrwrap and increases Aegion's presence in the pressure pipe market to nearly $90 million in annual revenues.

"We are pleased to have Underground Solutions join Aegion," Mr. Gordon commented. "Our market research suggests assembling a portfolio of technologies is the right strategy to establish a leading position in the North American pressure pipe rehabilitation market. We believe the combination of Underground Solutions' patented PVC technologies with our Insituform and Tyfo/Fibrwrap technologies will allow us to strengthen our position in this attractive market by offering our customers a broader portfolio of solutions."

In a separate action to continue the recent momentum in the Fyfe business, the Company signed a definitive agreement with Fyfe Group, LLC to acquire the legal rights to products, contract installation, intellectual property and licensing agreements in key international markets not previously purchased by Aegion for approximately $3 million. The transaction is expected to close during the first quarter of 2016 and will allow the Company to expand third party product sales across 72 countries in Europe, Africa and the Middle East.

Company info

17988 Edison Avenue
St. Louis, MO
US, 63005

Website:
aegion.com

Read more

Related Articles

Sponsored Brought to you by: Bobcat Company Logo

THE BOBCAT E88: STRENGTH IS ON YOUR SIDE

As one of the latest models in the R2-Series excavator lineup, the Bobcat® E88 delivers durability, performance and quality for more productivity. Technically speaking, it's a compact machine, but it brings big performance with its redesigned engine and optimized lift performance, plus undercarriage and counterweight improvements. All these enhancements make this excavator one of the highest-performing models in its size class. With impressive over-the-side lift capacity, you can dig with greater confidence over the side of the machine. Put it to the test against similar models from other manufacturers. You'll see that the E88 can outwork the competition.

Learn more