Xylem to Acquire Pure Technologies

Xylem to acquire Pure Technologies, a leader in smart infrastructure assessment and management for the water industry

Xylem Inc. (NYSE: XYL), a leading global water technology company, announced that it has entered into a definitive agreement to acquire all the issued and outstanding shares of Pure Technologies Ltd. (Pure) (TSX: PUR) for CAD $9.00 per share in cash, representing an enterprise value of CAD$509 million, or USD$397 million. Pure’s Board of Directors has unanimously approved the transaction and recommends that Pure shareholders vote in favor of the transaction.

Pure provides unique diagnostic and analytics solutions and services based on proprietary technologies to address key water and wastewater infrastructure challenges.

It is a leader in intelligent leak detection and condition assessment solutions for water distribution networks, a rapidly growing market driven by the increasing adoption of digital solutions to improve utilities’ capital and operating efficiency.

“The addition of Pure will strengthen Xylem’s position as a leading provider of intelligent solutions that address the water industry’s most persistent problems,” said Patrick Decker, Xylem President and Chief Executive Officer.

“Aging infrastructure is a top concern of water utilities around the world, and infrastructure assessment is an attractive, growing market that directly addresses this challenge in a cost-effective way. Pure’s solutions strongly complement the broader Xylem portfolio, particularly our recently acquired Visenti and Sensus solutions, creating a unique and disruptive platform of diagnostic, analytics and optimization   solutions for clean and wastewater networks.

Pure will also bring greater scale to our growing data analytics and software-as-a-service capabilities. As one company, we will provide customers with even more powerful and innovative solutions enabled by cutting-edge technologies.”

Earlier this year, Xylem and Pure entered into an exclusive commercial partnership in which Xylem represents Pure’s products and services in parts of the Middle East, India and Southeast Asia.

Image source: Pure Technologies

Mr. Decker continued, “We have already begun executing on significant international growth opportunities through our existing commercial collaboration. Upon closing this transaction, those efforts will accelerate and expand globally. We are excited to be adding a tremendously talented team to Xylem that shares our commitment to bringing innovative solutions to the water industry. We look forward to continuing that work together to create substantial value for our customers and shareholders.”

Pure reported consolidated revenue of CAD$126 million and CAD$21 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ending September 30, 2017. Xylem expects to achieve at least $12 million in annual cost synergies within two years of closing, including elimination of redundant public company costs, and procurement and footprint consolidation opportunities. Xylem also expects to generate revenue synergies that include accelerated international growth and cross-selling of complementary customer solutions. The USD$397 million valuation represents a multiple of approximately 17x 2018 estimated adjusted EBITDA for Pure, or approximately 11x including run-rate cost synergies.

Supplemental information on Xylem’s definitive agreement to acquire Pure Technologies and reconciliations for non-GAAP items are posted at http://investors.xyleminc.com.

Read full press release: Xylem

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Taxonomy

• Technology
• Business Strategy
• Leakage Detection
• Leakage
• Infrastructure
• Leakage Reduction
• Integrated Infrastructure
• Infrastructure Management
• Mergers & Acquisition