Thermal Energy International, a technology company providing custom energy and emission reduction and bioenergy solutions, is to acquire Bristol-based Gardner Energy Management for the base price of £2.7m ($5.5m CAD).
The acquisition will provide significant synergies between the two companies including a strong overlap in market segments and an expanded base of operations in European and Asian markets.
"Since integrating the GEM product line into our offerings in North America and China starting in 2006, Thermal Energy has been very impressed with the product performance and our customers" strong positive response," said Thermal Energy president and ceo Tim Angus. "Our familiarity with GEM products and business and the strong synergies between GEM and Thermal Energy made this acquisition a natural progression."
The acquisition will give Thermal Energy immediate access to an extensive list of multinational companies such as Abitibi-Bowater, BP Oil, Dow Corning, Dupont, Eli Lilly, GlaxoSmithKline, Nestle and Shell, which have been serviced by GEM.
"The GEM technology has opened doors for us in North America and China, and been a tremendous value-add to projects involving our other technologies such as FLU-ACE and DRY-REX," said Angus. "In addition to seeing tremendous global growth for the GEM core business going forward, with over 50,000 GEM traps installed throughout Europe there is an extensive multinational customer base that represents significant cross selling opportunities for Thermal Energy's other technologies and solutions."
Tim Gardner, GEM's founder and managing director will remain with the company for at least one year to assist Thermal Energy's management team in overseeing the integration into a single organisation. He established GEM in 1995 to manufacture and market the GEM Venturi Orifice Steam Trap.
Up to £1.3m (approximately $2.6m CAD) is payable in a combination of cash and shares on an earn-out basis over a three-year period based on the future performance of the GEM business line.
The transaction is expected to close on or before 4 July 2008, subject to financing and regulatory approvals.