Water Intelligence buys Ireland's Feakle Gas and Plumbing

9th Jul 2024 12:09

(Sharecast News) - Water Intelligence, a multinational provider of minimally-invasive leak detection and remediation solutions, announced the strategic acquisition of Feakle Gas and Plumbing (FG&P) in Ireland on Tuesday, through its Water Intelligence International (WII) subsidiary.

The AIM-traded firm said the acquisition was intended to enhance its capacity to deliver water and wastewater solutions across municipal, commercial, and residential sectors in Ireland and throughout the EU.

It said the acquisition, valued at €2.32m, was based on FG&P's 2023 accounts, which reported €3.7m in sales and adjusted operating profits of €0.55m.

The transaction was structured as a four-year earnout, starting with an initial consideration of €0.5m followed by annual payments of €0.44m contingent on maintaining a minimum operating profit of €0.43m each year.

An additional €75,000 payment would be made on achieving €0.65m in new sales from WII's municipal, commercial, and residential solutions.

The new business lines would be synergistic with WII's expansion, particularly leveraging its proprietary sewer diagnostic product, Pulse.

Water Intelligence said the acquisition would be financially accretive, and was strategically positioned to capitalise on significant market opportunities in the EU.

According to the OECD, the European Union would require about €290bn in investment for water and sanitation needs by 2030, with recent forecasts raising the estimate to $476bn in water and wastewater infrastructure capital expenditure from 2024 to 2030.

FG&P, which operates between Shannon and Dublin, boasted a skilled workforce and a robust service and construction plumbing business.

That, the directors said, would integrate with Water Intelligence's American Leak Detection (ALD) solutions and WII's commercial and municipal offerings.

The acquisition would support Water Intelligence's expansion into the EU, enhancing its operational footprint and enabling the group to meet the growing demand driven by EU directives on drinking water and urban wastewater treatment.

"We are excited by the growth opportunities available to the Group in Ireland and the EU," said executive chairman Patrick DeSouza.

"We believe that the FG&P team and its leadership will create significant value for our shareholders.

"Given the proximity of Ireland to our existing operations in the UK, our teams will be able to work together seamlessly as we expand our international operations."

At 1129 BST, shares in Water Intelligence were up 2.52% at 440p.

Reporting by Josh White for Sharecast.com.