14:19 | 27.07.2011
Insituform Technologies, Inc. Announces Agreement to Acquire North American Business of Fyfe Group and Option to Acquire Fyfe Group’s Asian, European and Latin American Operations
Insituform Technologies, Inc. (“Insituform” or the “Company”) (Nasdaq
Global Select Market: INSU) today announced the execution of a
definitive agreement to acquire the North American business of Fyfe
Group, LLC for a purchase price of $115.8 million. The Company also was
granted an option to acquire Fyfe Group’s Asian, European and Latin
American operations. The Company expects to close the North American
acquisition by August 31, 2011.
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.
Joe Burgess, President and Chief Executive Officer of Insituform,
stated, “The current addressable market for FRP composites for
construction rehabilitation projects in the United States is
approximately $650 million. We believe that this market will grow to
more than $1.4 billion by 2016. Fyfe Group, through its existing
proprietary technologies and based on its exemplary record of
development and innovation of FRP products and solutions for this
market, is well positioned to capture high value growth as FRP composite
technologies gain further acceptance in high growth infrastructure
markets.”
Burgess further stated, “Insituform’s acquisition of Fyfe Group will
complement Insituform’s existing pipe protection capabilities, create
cross-selling opportunities, increase the global market opportunity of
Insituform’s existing business, and diversify the Company’s presence
across end-markets. This acquisition also provides a unique opportunity
for us to expand our business beyond pipelines, building upon our
experience in protecting valuable infrastructure assets. We are excited
how Fyfe Group’s business fits together with our existing platform.”
Commenting on the acquisition, Ed Fyfe, Chairman of Fyfe Group, said,
“We are excited about working with Insituform. This transaction provides
a unique opportunity to offer complementary products and services to a
broader set of customers globally. Fyfe’s history of innovation,
technological development and leadership mirrors Insituform’s.”
Heath Carr, Chief Executive Officer of Fyfe Group, stated, “The combined
company will provide a product and service offering for the
strengthening, protection and rehabilitation of valuable infrastructure
assets that will rival any competitor. Insituform is perfectly
positioned to help Fyfe Group achieve its growth objectives. The entire
Fyfe team is excited about this relationship.”
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 following the
closing.
Under the definitive agreement, Fyfe Group granted Insituform an option
for a period of one year after the closing of the North America
acquisition 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 would close prior to year end.
Insituform expects the Fyfe Group North American transaction to be
accretive to earnings in 2011 and 2012 (before acquisition transaction
expenses).
The consummation of the North American acquisition is subject to
customary conditions, including the availability of financing.
Insituform is working with its lead banks, Bank of America, N.A. and
JPMorgan Chase Bank, N.A., to put in place a new $450 million senior
credit facility that would provide the required financing.
In addition, the Company anticipates that it would redeem its $65.0
million, 6.54% Senior Notes, due April 2013, in connection with the
closing of the North American transaction. The proceeds for the
redemption of the Senior Notes, including any associated make-whole
payment (approximately $6.0 million as of June 30, 2011), would be
borrowed against the Company’s new senior credit facility.
About Insituform Technologies, Inc.
Insituform Technologies, Inc. is a global leader in pipeline protection.
Insituform provides proprietary technologies and services for
rehabilitating sewer, water, energy and mining piping systems and the
corrosion protection of industrial pipelines. 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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