Consolidated Water Co. Ltd has exercised its option to purchase, through its wholly-owned subsidiary, Consolidated Water U.S. Holdings, the remaining 49% interest in its subsidiary, Aerex Industries, for US$8.5 million.
As a result of the transaction, on 24 Jan., Consolidated Water became the 100% owner of Aerex. Based in Ft. Pierce, Florida, Aerex is a custom and specialty manufacturer of water treatment-related systems and products. It also provides design, engineering, management, operating and other services applicable to commercial, municipal and industrial water production.
Under the terms of the original purchase agreement for Aerex, Consolidated Water had the option to buy out Aerex’s 49% shareholder, Thomas Donnick, at fair market value at the time the option would be exercised. The option had been exercisable since February 2019.
“Since our initial acquisition of 51% of Aerex in February 2016, we have strengthened Aerex’s capabilities and resources and expanded its product offerings, which has resulted in improving results,” Consolidated Water CEO, Rick McTaggart said in a press release. “Given our expectations for this business, we deemed this an opportune time for us to exercise our call option for the remaining ownership. We expect this to contribute to increasing shareholder value in the coming years.”
Aerex generated income from operations of approximately $2 million on $10.5 million revenue for the nine months ended 30 Sept., 2019. In 2018, Aerex had incurred a loss from operations of $147,906 on revenue of $7.3 million.
Following the close of the transaction, Donnick stepped down as president of Aerex, but he will continue to serve in a consulting capacity.
“Tom has been an excellent business partner since we invested in Aerex nearly four years ago, and we’re glad we can continue to benefit from his vast industry experience as a consultant to the company,” McTaggart said.
Jason Carlson has been promoted from vice president to president of Aerex. Jamie Bryan, who was appointed last year as Consolidated Water’s vice president of manufacturing, will continue to oversee the expansion of Aerex’s operations.