Aegion Corporation today announced the completion of the acquisition of Underground Solutions Inc., an innovative provider of proprietary fusible PVC technology for the rehabilitation of pressure pipelines.
The Company paid approximately $85 million to acquire Underground Solutions and separately paid $5.2 million for the discounted value of tax benefits associated with existing net operating loss carry forwards. The Company funded the transaction with approximately $60 million in cash and the remainder borrowed through its revolving line of credit. The Company expects contributions from Underground Solutions to be accretive to GAAP earnings per share in 2016 with estimated revenues of $50 million and operating margins in excess of 10 percent.
Charles R. Gordon, Aegion’s President and Chief Executive Officer, said, “Underground Solutions’ patented PVC pipe and pipe fusing technologies, which uniquely complement our Insituform® and Tyfo®/Fibrwrap® customer solutions, will enable Aegion to further advance our strategy to expand in the trenchless pressure pipe rehabilitation market. We are especially pleased to have several key members of Underground Solutions’ senior management team, who average more than 20 years of industry experience, join Aegion. These individuals will form an expanded team within our Infrastructure Solutions platform dedicated to this promising end market.”
Commenting on the acquisition, Frank R. Firsching, Vice President and General Manager of Underground Solutions, said, “We believe our products offer a distinct advantage to rehabilitate pipelines in water, sewer and conduit applications. We are excited to join Aegion and add our capabilities with their scale and market leading technologies to create a more effective and less disruptive alternative to significantly reduce water loss in aging pipeline infrastructure.”