Clearford Water Systems Announces the Acquisition of Koester Canada & Team Aquatic

Clearford Water Systems

December 11, 2017

Clearford Water Systems Inc. has announced the acquisition of Koester Canada Inc., an Ontario-based subsidiary of Koester Associates, Inc., a water and wastewater solutions and equipment supplier servicing the States of New York and New Jersey.

Koester Canada’s two divisions, the Koester Canada Design-Build and Koester Team Aquatic Operations Group, will be renamed Clearford-Koester Canada and Clearford Waterworks, respectively, while continuing to provide high quality management of water supply and wastewater treatment systems for small communities along with the manufacturing and supply of packaged treatment solutions, including containerized membrane plants for advanced water treatment. Clearford expects to expand the Waterworks division by acquiring other operating businesses, acting as a consolidator in this specialized segment of the North American water infrastructure sector.

As previously announced on June 22, 2017, and July 28, 2017, Clearford is implementing a new business plan, which includes the pursuit of strategic acquisitions supportive of the Company’s growth in the decentralized water and wastewater treatment sector. The business model provides Clearford with the unique opportunity to become a utility-like operating company with the resources & capabilities to deliver water and wastewater solutions at a lower life-cycle cost to municipal clients and private developers alike through enabling proprietary technologies and processes. As indicated in the May 2017 Frost & Sullivan report, the global decentralized/containerized water and wastewater treatment systems market is expected to grow from US$3.99 billion in 2016 to US$6.08 billion in 2023, reflecting a compound annual growth rate of 6.2%.

“This is the natural progression of the Company’s unified water management business model”, said Kevin Loiselle, President & CEO of Clearford. “The acquisition completes Clearford’s unique product and service offering, and positions the Company for growth with sector-leading efficiency and reliability. By integrating Clearford’s product range and service offering with Koester Canada’s design-build and operating divisions, Clearford is now in control of its core value chain, enabling the rapid delivery of water solutions, with a competitive advantage to propel the Company for growth in the North American market and beyond.”

President of Koester Canada, Richard Nie, commented: “We are very excited with the path forward and the opportunity to leverage our packaged treatment solutions within the Clearford One® wastewater system. The pre-treatment approach afforded by Clearford’s system further enhances the footprint and technological efficiencies of our modular smart membrane plant, making it rapidly deployable to communities of any size.”

Koester Canada has $3 million in revenue for its last fiscal year, representing 6% year-over-year revenue growth on an unaudited basis. During the 9-month period ended September 30, 2017, and prior to closing the transaction, Koester Canada recorded $3.4 million in revenue, with earnings before interest, taxes, depreciation and amortisation of $750,000 on an unaudited basis. Koester Canada revenues include recurring monthly revenue for operating & maintenance contracts attributable to the Team Aquatic Operations Group. Team Aquatic currently operates over 50 privately owned communal water systems in Ontario, with a significant number of multi-year contracts representing approximately $5 million in backlog for existing service contracts. The Koester Canada Design-Build group has approximately $1 million in unbilled backlog at the date of the acquisition. The total revenues generated by Clearford’s operating subsidiaries, including (i) the newly acquired Clearford-Koester Canada (Design-Build), (ii) the newly acquired Clearford Waterworks (Team Aquatic Operations Group), and (iii) UV Pure, with its recently launched new generation purification product range (Hallett), is forecasted to exceed $10 million in FY 2018.

Clearford will acquire Koester Canada in a share-for-share exchange transaction. The Company will issue 14,485,338 new treasury shares for 16,296,000 of the issued and outstanding shares of Koester Canada, representing 100% of the issued and outstanding shares of Koester Canada. Prior to the exchange, Koester Canada was acquired by an acquisition vehicle formed and capitalized by long-term debt, bearing interest at 9.75%, which was assumed by Koester Canada, as the surviving entity post-amalgamation with the acquisition vehicle. The acquisition vehicle paid $5.4 million and issued 8,146,000 shares from treasury to existing Koester Canada shareholders, with the remaining 8,150,000 shares held by the principals of the acquisition vehicle. A setup fee of 7.5% was charged on the transaction. As part of the transaction, the surviving entity of Koester Canada assumed the debt of the acquisition vehicle and provided a General Security Agreement over all of its assets, excluding existing permitted encumbrances. All parties to the transaction are dealing at arm’s length. The transaction has closed with all documents signed and held in escrow, pending final approval of the transaction by the TSX Venture Exchange as a Reviewable Transaction.

 

Related Articles


Changing Scene

  • SEW-Eurodrive: MAXOLUTION System Solutions

    SEW-Eurodrive: MAXOLUTION System Solutions

    Whether in production or logistics operations, MAXOLUTION is synonymous with innovation in factory automation – across all industries and worldwide – helping you achieve your vision of an adaptable and resilient lean smart factory. Under the MAXOLUTION brand, SEW-EURODRIVE creates customized solutions for cutting-edge materials handling technology – from the shop floor through to IT.… Read More…

  • 6 Ways the New maxon Website Enhances Your Experience

    6 Ways the New maxon Website Enhances Your Experience

    maxon develops drives that are among the best in the world. They advance technologies that save lives on Earth, make driving and flying safer, and enable the use of robots in space. Where uncompromising precision and the highest quality standards are crucial for success, their drive systems show what they are made of. Complexity is… Read More…


Sponsored Content
The Easy Way to the Industrial IoT

The way to the Industrial IoT does not have to be complicated. Whether access to valuable data is required or new, data-driven services are to be generated, Weidmuller enables its customers to go from data to value the easy way. Weidmuller’s comprehensive and cutting-edge IIoT portfolio applies to greenfield and brownfield applications. Weidmuller offers components and solutions from data acquisition, data pre-processing, data communication and data analysis.

Visit Weidmuller’s Industrial IoT Portfolio.


ADVANCED Motion Controls Takes Servo Drives to New Heights (and Depths) with FlexPro Extended Environment Product Line

Advanced Motion Controls is proud to announce the addition of six new CANopen servo drives with Extended Environment capabilities to their FlexPro line. These new drives join AMC’s existing EtherCAT Extended Environment FlexPro drives, making the FlexPro line the go-to solution for motion control applications in harsh environments.

Many motion control applications take place in conditions that are less than ideal, such as extreme temperatures, high and low pressures, shocks and vibrations, and contamination. Electronics, including servo drives, can malfunction or sustain permanent damage in these conditions.

Read More


Service Wire Co. Announces New Titles for Key Executives

Bruce Kesler and Mark Gatewood have been given new titles and responsibilities for Service Wire Co.

Bruce Kesler has assumed the role of Senior Director – Business Development. Bruce will be responsible for Service Wire’s largest strategic accounts and our growing Strategic Accounts Team.

Mark Gatewood has been promoted to the role of Vice President – Sales & Marketing. In this role, Gatewood will lead the efforts of Service Wire Company’s entire sales and marketing organization in all market verticals.

Read More


Tri-Mach Announces the Purchase of an Additional 45,000 sq ft. Facility

Tri-Mach Elmira Facility

Recently, Tri-Mach Inc. was thrilled to announce the addition of a new 45,000 sq ft. facility. Located at 285 Union St., Elmira, ON, this facility expands Tri-Mach’s capabilities, allowing them to better serve the growing needs of their customers.

Positioning for growth, this additional facility will allow Tri-Mach to continue taking on large-scale projects, enhance product performance testing, and provide equipment storage for their customers. The building will also be the new home to their Skilled Trades Centre of Excellence.

Read More


JMP Parent Company, CONVERGIX Acquires AGR Automation, Expanding Global Reach

Convergix Automation Solutions has completed the acquisition of AGR Automation (“AGR”), a UK-based provider of custom, high-performance automation design and systems integration primarily to the life sciences industry.

Following Convergix’s acquisitions of JMP Solutions in August 2021 and Classic Design in February 2022, AGR marks the third investment in Crestview’s strategy to build Convergix into a diversified automation solutions provider targeting the global $500+ billion market, with a particular focus on the $70 billion global systems integration and connectivity segments. Financial terms of the transaction were not disclosed.

Read More


Latest Articles

  • Making the Sustainable Transformation of the Process Industry a Success

    Making the Sustainable Transformation of the Process Industry a Success

    By Krystie Johnston and Dr. Manfred Jagiella – Sustainability facilitates opportunity when approached with a mindset to preserve resources and promote circularity. We share one Earth, and it is our global responsibility to care for it for the next generation. Endress+Hauser is one global company that understands this responsibility – and practices it as well.… Read More…

  • Why NOARK’s 12VDC Shunt Trip Coils for MCCBs Make Power Systems Reliable and Safer

    Why NOARK’s 12VDC Shunt Trip Coils for MCCBs Make Power Systems Reliable and Safer

    Circuit breakers are an essential component of any modern electrical system. Designed to protect your home or business from potential overloads or short circuits, these devices are your first line of defense against electrical fires. There are, however, situations where remote tripping of the circuit breaker may be required. It could be for operational reasons,… Read More…