Water Intelligence buys two Aussie companies for $434,000

AIM-listed Water Intelligence is to buy two Australian utility companies, which are the leak detection company's former franchisees, for $434,000 in order to expand its presence in the country.

The company will buy Sydney-based Australian Leak Detection and Australian Watermain, pending regulatory clearance, which are part of a former franchise of American Leak Detection, a business unit of Water Intelligence.

The acquisitions, which are expected to be accretive to earnings, are to help the company grow internationally as it already has assets in the UK, US, Canada and Australia, and follows the September acquisition of NRW Utilities, a provider of water leak detection and municipal sewer and wastewater services.

Of the total consideration, $105,409 will be paid at the closing of the deal, which will be adjusted depending on the how much time is needed for regulatory approval, $102,470 is to be paid on the first anniversary of the closing and the remaining $226,065 will be paid on the second anniversary.

With the Australian acquisitions the company will have a store presence in Sydney, which will assist the growth of other existing American Leak Detection franchisees in the country and sell additional franchises.

Executive chairman Patrick DeSouza said: “One of our American Leak Detection managers has already relocated to Sydney and we expect transition to be smooth. The acquisition will accelerate the development of a strategic platform in Australia to help all of our existing Australian franchisees.

“We are looking forward to building out the American Leak Detection network in Australia and introducing capabilities from NRW Utilities in the fast growing water conservation market in Australia."

Australian Leak Detection and Australian Watermain provide leak detection and network survey services and generated combined revenues of $790,000 and pre-tax profits of $311,000 for the year ended September. They have combined net assets of $566,287.

Shares in Water Intelligence were up 4.44% to 84.60p at 0800 GMT.