Reacquisition of Fresno,
California Franchise
Sale of New Franchise in
Albany and Saratoga, New York
Water Intelligence plc (AIM: WATR.L) ("Water
Intelligence" or "Group"), a leading multinational provider of
precision, minimally-invasive leak detection and remediation
solutions for both potable and non-potable water, is
pleased to announce two transactions: the reacquisition of its
franchise in Fresno, California and the sale of a new franchise for
Albany and Saratoga, New York, both within the Group's American
Leak Detection ("ALD") subsidiary.
Key
terms of the Reacquisition
The purchase price of $2.9 million in
cash is spread over two years and includes all assets required to
conduct operations, including trucks and equipment. An initial $2.0
million is payable immediately and $0.9 million is payable on the
first anniversary of closing. The purchase price is based on 2023
pro forma of $1.8 million in revenue, $0.6 million in adjusted
profit before tax and total assets of $0.5 million. The
transaction is accretive for the Group's shareholders.
Strategic rationale for the Reacquisition
Fresno is a sizeable, fast growing
city in central California in the heart of US agribusiness; an area
in which market demand for water savings is strong and getting to
be a critical issue given changing climate conditions. The
operation is growing and expected to accelerate its trajectory with
additional corporate resources including the deployment of
proprietary technologies, such as ALD's Ditch Liner offering that
will be helpful for agribusiness and Pulse offering that provides
for minimally-invasive diagnostics of municipal and residential
sewer blockages. As Fresno is located between the Bay Area and Los
Angeles in the Central Valley of California, the reacquisition
reinforces the Group's strategy of establishing regional corporate
hubs in the US that fuel growth in adjacent franchise
locations.
Strategic rationale and terms for the Sale of the New
Franchise
ALD is committed to building its
franchise System. Albany and Saratoga are key cities in upstate New
York and comprise part of what is known as the Capital District of
New York. Albany is the state capital whilst Saratoga is the center
of a series of resort locations in upstate New York and known for
horse racing and wine growing. Several of ALD's national partners
including insurance and property management companies have sought
ALD's national brand and the quality of its solutions for this
region. The upfront consideration for launching this territory is
$0.1 million. ALD expects to receive royalty income from
sales starting in July after the completion of training.
More broadly, in terms of ALD's
growth strategy, located between this new franchise location in
Albany and ALD's corporate location on the Canadian side of Niagara
Falls, there are several large cities - Buffalo, Syracuse, and
Rochester - in upstate New York around which ALD can deliver future
growth, whether through corporate operations or selling more
franchises.
Executive Chairman, Dr. Patrick DeSouza
commented: "We are very pleased with the two transactions announced
today because they reinforce our franchise value proposition and
brand. Moreover, both are expected to contribute to sustainable
organic growth for the Group. First, the franchise reacquisition is
an accretive transaction with plenty of scope for additional growth
given market demand for water savings in the center of US
agribusiness. Second, our new franchisee will help our brand
deliver solutions around the capital of New York state and will
make a great launch point for further service delivery throughout
upstate New York. We are committed to our growth plans and see
additional opportunities ahead."
Enquiries:
Water
Intelligence plc
Laura Bass, Director of Strategic
Finance
Tel: +1 (203) 584-8240
Grant Thornton UK LLP - Nominated
Adviser
Tel: +44 (0)20 7383 5100
Philip Secrett
Harrison Clarke
Ciara Donnelly
RBC
Capital Markets - Joint Broker
Tel: +44 (0)20 7653
4000
Jill Li
Elizabeth Evans
Daniel Saveski
Dowgate Capital Ltd - Joint Broker
Tel: +44 (0)20 3903 7715
Stephen Norcross
