Insituform Technologies, Inc. Closes Acquisition of North American Business of Fyfe Group, LLC
September 01 2011 - 10:08AM
Business Wire
Insituform Technologies, Inc. (Nasdaq Global Select Market:
INSU) (“Insituform” or the “Company”) today announced the closing
of its acquisition of the North American business of Fyfe Group,
LLC. The transaction purchase price was approximately $115.8
million.
Fyfe Group, based in San Diego, California, is a pioneer and
industry leader in the development, manufacture and installation of
fiber reinforced polymer (FRP) systems for the structural repair,
strengthening and restoration of pipelines (oil, gas, water and
wastewater), buildings (commercial, Federal, municipal, residential
and parking garages), bridges and tunnels, and waterfront
structures. Lead by founder and Chairman, Ed Fyfe, and Chief
Executive Officer, Heath Carr, Fyfe Group has a comprehensive
portfolio of patented and other proprietary technologies and
products, including its Tyfo® Fibrwrap® System, the only carbon
fiber solution on the market meeting 2009 International Building
Code requirements. Fyfe Group’s product and service offering also
includes pipeline rehabilitation, concrete repair, epoxy injection,
corrosion mitigation and specialty coatings services. For 2010,
Fyfe Group had North American revenues and EBITDA of approximately
$45.1 million and $10.4 million, respectively.
The acquisition was financed by a $250 million term loan under
the Company’s new $500 million credit facility.
Joe Burgess, President and Chief Executive Officer of
Insituform, said, “Our acquisition of Fyfe Group’s North American
business is in keeping with our objective to develop or acquire
high value products and services to prevent the deterioration of
infrastructure, using our global distribution channel to expand our
leadership position in key energy, mining, water and wastewater,
commercial building, transportation and coastal markets, while
reducing our reliance on the municipal bid process. Fyfe Group’s
product and service offering complements Insituform’s existing
product and service portfolio, but also expands the markets into
which we offer our products and services. In addition, we believe
that Fyfe Group’s patented and other proprietary technologies
distinguish the company from its competitors and allow the company
to achieve compelling returns. This acquisition furthers our stated
objective of achieving a 15% return by 2012.”
Fyfe Group’s senior management team, including Ed Fyfe and Heath
Carr, will remain with the company and be responsible for its
day-to-day operations, growth and continued technological
innovation. In connection with the closing of the Fyfe North
America transaction, Ed Fyfe and Heath Carr also purchased $3.0
million and $1.0 million, respectively, of Insituform common stock
at a price of $16.21 per share (Insituform’s closing stock price on
August 30, 2011). The shares of common stock are subject to certain
transfer restrictions until February 2013.
Under the acquisition agreement for the Fyfe North America
transaction, Fyfe Group granted Insituform an option until July 26,
2012 to acquire Fyfe Group’s international operations in Asia,
Europe and Latin America at a purchase price to be negotiated by
the parties at the time of exercise. For 2010, Fyfe Group’s
international operations (excluding Canada) had revenues and an
EBITDA margin of approximately $20 million and 20%, respectively.
Subject to due diligence and discussions with Fyfe Group’s
international partners, Insituform anticipates that the acquisition
of Fyfe Group’s international operations will close prior to year
end.
Insituform expects the Fyfe Group North America transaction to
be accretive to earnings in 2011 (before acquisition transaction
expenses).
About Insituform Technologies, Inc.
Insituform Technologies, Inc. is a global leader in
infrastructure protection. Insituform provides proprietary
technologies and services for the corrosion protection of
industrial pipelines and for rehabilitating and strengthening
sewer, water, energy and mining piping systems, buildings, bridges
and tunnels and waterfront structures. More information about the
Company can be found on its internet site at
www.insituform.com.
About Fyfe Group, LLC
Fyfe Group has been a pioneer in adapting FRP composites for use
in the construction rehabilitation sector including structural
repair and reinforcements for buildings, corrosion wrapping for
waterfront structures, seismic bracing for structures, leak
protection for large diameter pipelines and blast protection for
commercial and government properties. Fiber reinforced polymer
systems use fibers (carbon fiber, fiberglass, Kevlar) in
combination with polymer resins to form a composite product. FRP
materials have revolutionized the aerospace, marine, electrical,
corrosion-resistance and transportations industries. FRP composites
capitalize on their high strength-to-weight ratio and inherent
resistance to weather and the corrosive effects of water, salt air
and sea water. Founder and Chairman, Ed Fyfe, and his companies
have received more than 25 United States patents regarding FRP
composites and their applications. More information about Fyfe can
be found on its internet site at www.fyfeco.com.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for forward-looking statements. The Company makes
forward-looking statements in this news release that represent the
Company’s beliefs or expectations about future events or financial
performance. These forward-looking statements are based on
information currently available to the Company and on management’s
beliefs, assumptions, estimates or projections and are not
guarantees of future events or results. When used in this document,
the words “anticipate,” “estimate,” “believe,” “plan,” “intend,”
“may,” “will” and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of
identifying such statements. Such statements are subject to known
and unknown risks, uncertainties and assumptions, including those
referred to in the “Risk Factors” section of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2010, as filed
with the Securities and Exchange Commission on February 28, 2011
and in our subsequent quarterly reports on Form 10-Q. In light of
these risks, uncertainties and assumptions, the forward-looking
events may not occur. In addition, our actual results may vary
materially from those anticipated, estimated, suggested or
projected. Except as required by law, we do not assume a duty to
update forward-looking statement, whether as a result of new
information, future events or otherwise. Investors should, however,
review additional disclosures made by the Company from time to time
in its periodic filings with the Securities and Exchange
Commission. Please use caution and do not place reliance on
forward-looking statements. All forward-looking statements made by
the Company in this news release are qualified by these cautionary
statements.
Insituform® and the Insituform® logo are the registered
trademarks of Insituform Technologies, Inc. and its affiliates.
Tyfo® and Fibrwrap® are the registered trademarks of Fyfe Group,
LLC and its affiliates.
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