Calgary-based water pipeline company accepts $509M offer from New York-based Xylem

A Calgary-based water pipeline technology and inspection company has agreed to be sold for more than half a billion dollars to New York-based Xylem Inc.

Pure Technologies Ltd. says the offering price of $9 per share, or $509 million in cash, is more than double its closing share price Friday. The stock closed at $8.93 on Monday, double its opening value.

Xylem CEO Patrick Decker said Pure will help it provide costeffective solutions to address worldwide concerns about aging water utility infrastructure.

500 EMPLOYEES

Pure has about 500 employees in corporate offices in Mississauga, Ont., and Columbia, Md., as well as regional offices in the United States, Mexico, Colombia, Australia and China. Most of its $126 million in revenue for the 12 months ended Sept. 30 was generated in North America.

“The value being offered in this transaction is a recognition of the highly strategic and unique nature of Pure’s business and technology,” Jamie Paulson, executive chairman of Pure, said in a statement. “In Xylem, Pure has found the right partner to accelerate growth and to have a positive impact on the water management ecosystem.”

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

Xylem, which has 16,000 employees and annual revenue of US$3.8 billion, said it expects to achieve at least US$12 million in annual cost savings within two years of the close of the deal, which requires shareholder and regulatory approvals.

“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,” Patrick Decker, Xylem president and CEO, said in a statement.

“As one company, we will provide customers with even more powerful and innovative solutions enabled by cutting-edge technologies.”