Insituform Technologies, Inc. (Nasdaq Global Select Market: INSU) today announced that in addition to the recent organic growth initiatives of its Energy and Mining group in the Middle East, it has closed on the acquisition of CRTS, Inc., an Oklahoma company (“CRTS”), and executed definitive agreements to acquire Hockway Limited and Hockway Middle East FZC, based in the United Kingdom and UAE, respectively (collectively, “Hockway”).
Joe Burgess, President and Chief Executive Officer of Insituform, stated “these acquisitions will strengthen and expand Insituform’s Energy and Mining group’s presence and capabilities in the Middle East, North America and Brazil. CRTS has performed significant work in Saudi Arabia over the past few years and we expect it to continue to expand its presence in Saudi Arabia and other countries in the Middle East. Additionally, we believe that CRTS’s patented and other proprietary robotic pipe coating technologies distinguish the company from its competitors and allow the company to achieve compelling production efficiencies in both onshore and offshore pipe coating projects. Hockway, which has operated in the United Kingdom since 1975, established a base of operations in Dubai in 2009. From its Dubai office, Hockway provides cathodic protection products and services throughout the Middle East, including Iraq. These acquisitions complement Insituform’s organic growth in the Middle East, which includes an office opened in Oman in January 2010, significant projects performed by United Pipeline Systems in the Middle East over the past several years, Corrpro Companies’ long-term relationship with and work for Kuwaiti Oil Company and the recently announced joint venture in Saudi Arabia between Saudi Trading & Research Co., Ltd. and Corrpro Companies.”
CRTS, a privately-held company based in Tulsa, Oklahoma, delivers proprietary internal and external coating services and equipment for new pipeline construction projects from offices in North America, the Middle East and Brazil. For 2010, CRTS had total revenues of approximately $13.3 million and earnings before interest, taxes and depreciation (“EBITDA”) of approximately $3.8 million. The purchase price was $24.0 million at closing with CRTS shareholders able to earn up to an additional $15.0 million upon the achievement of certain performance targets over the three-year period ending December 31, 2013. The purchase price was funded in part by borrowings against the Company’s line of credit. The transaction closed on June 30, 2011.
James A. Huggins, President of CRTS, said, “CRTS is excited about the opportunity this relationship represents. Insituform and its many business units are perfectly positioned to help us grow and increase the product offerings to both our customer bases. We share markets, customers and customer-focused product and service solutions.”
Hockway was established in the United Kingdom in 1975 to service the cathodic protection requirements of British engineers working in the Middle East. In 2009, Hockway established operations in Dubai, United Arab Emirates. Hockway provides both onshore and offshore cathodic protection services in addition to manufacturing a wide array of cathodic protection components. For 2010, Hockway had total revenues of approximately $10.0 million and EBITDA of approximately $0.9 million. The purchase price will be $4.6 million at closing with Hockway shareholders able to earn up to an additional $1.5 million upon the achievement of certain performance targets over the three-year period ending December 31, 2013. The purchase price will be funded out of the Company’s cash balances. The transaction is expected to close on or around July 31, 2011 following approval from the regulatory authorities in the UAE.
Dorwin Hawn, Insituform Senior Vice President, Energy and Mining Division, said, “Since 2009, Insituform has been focused not only on the growth of our Energy and Mining businesses but on strategic expansion into the Middle East. We believe these transactions will accelerate our growth throughout the Middle East. In addition, the capabilities of CRTS and Hockway will strengthen the technical resources of our Energy and Mining team.”
CRTS was represented in the transaction by ClearRidge Capital, an Oklahoma investment banking firm.
About Insituform Technologies, Inc.
Insituform Technologies, Inc. is a global leader in pipeline protection. Insituform provides proprietary technologies and services for rehabilitating sewer, water, energy and mining piping systems and the corrosion protection of industrial pipelines. More information about the Company can be found on its internet site at www.insituform.com.
About United Pipeline Systems
United Pipeline Systems, a division of Insituform Technologies, Inc., is a global leader in providing high-density polyethylene (HDPE) lining systems for internal pipeline protection. United has constructed and internally lined more than 13,000 kilometers (8,000 miles) of pipelines on six continents since 1985. United developed the Tite Liner® system, which protects steel pipelines from a variety of chemicals and abrasives through a broad range of temperatures and pressures. More information about United can be found at www.unitedpipeline.com.
About Corrpro
Corrpro Companies, Inc., a subsidiary of Insituform Technologies, Inc., is the leading provider of cathodic protection systems and engineering services in North America and also has operations in Europe and the Middle East. Corrpro offers corrosion solutions for every industrial market including pipeline, refinery, above and underground storage tanks, water, wastewater, concrete, infrastructure, offshore, and marine. More information about Corrpro can be found on its internet site at www.corrpro.com.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. The Company makes forward-looking statements in this news release that represent the Company’s beliefs or expectations about future events or financial performance. These forward-looking statements are based on information currently available to the Company and on management’s beliefs, assumptions, estimates or projections and are not guarantees of future events or results. When used in this document, the words “anticipate,” “estimate,” “believe,” “plan,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Such statements are subject to known and unknown risks, uncertainties and assumptions, including those referred to in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 28, 2011 and in our subsequent quarterly reports on Form 10-Q. In light of these risks, uncertainties and assumptions, the forward-looking events may not occur. In addition, our actual results may vary materially from those anticipated, estimated, suggested or projected. Except as required by law, we do not assume a duty to update forward-looking statement, whether as a result of new information, future events or otherwise. Investors should, however, review additional disclosures made by the Company from time to time in its periodic filings with the Securities and Exchange Commission. Please use caution and do not place reliance on forward-looking statements. All forward looking-statements made by the Company in this news release are qualified by these cautionary statements.
Insituform®, United®, Corrpro®, Tite Liner®, the Insituform® logo, the United® logo and the Corrpro® logo are the registered trademarks of Insituform Technologies, Inc. and its affiliates.
Contacts:
David F. Morris, 636-530-8000
Senior
Vice President and Chief Administrative Officer
