Australian-Singaporean water and wastewater treatment company De.mem has signed a binding agreement to acquire 100% of the Tasmanian water and wastewater treatment systems business Pumptech Tasmania Pty Ltd.
Established in 2000, Pumptech specialises in the design, supply, installation and maintenance of pump sets, pump stations and sewage and water treatment plants. Clients include the Tasmanian utility company TasWater, municipalities and large corporations from the food & beverage sector and other industries in Tasmania and Victoria. Pumptech had unaudited revenues of around A$2.5 million for the 12 months ended 30 June 2019.
De.mem says there is strong strategic rationale for the acquisition including geographic expansion, further penetration of target customer verticals, product portfolio expansion, cross-sell opportunities, economies of scale, cost synergies and earnings accretion. The acquisition will expand De.mem’s presence in the food & beverage sector and geographically diversifies the company’s revenue base across Australia.
“The acquisition of Pumptech Tasmania Pty Ltd is another milestone achieved for De.mem,” said Andreas Kroell, CEO of De.mem. “With a strong, recurring revenue base, we see a great opportunity to service Pumptech clients with a wider product and solutions portfolio, leveraging the wider De.mem group’s capabilities and technology. It is a great opportunity for accelerated growth as De.mem works to become a leading supplier for water and wastewater treatment equipment across Australia.”
Pumptech founders Grant Petterwood and Graham Van Essen will retain their executive director roles and join the De.mem senior management team.
“De.mem’s innovative membrane technologies and wide product range are a key differentiator in the market,” said Petterwood. “They provide for an attractive addition to the existing product offering of Pumptech. We look forward to jointly expanding the combined business in Tasmania and across Australia.”
De.mem will pay A$1.05 million for Pumptech, comprising A$900 000 in cash with A$450 000 immediately payable, followed by three deferred payments of A$150 000 over 36 months, plus A$150 000 in De.mem shares. The transaction will be funded through existing cash reserves.