Per Aarleff Acquires Ownership of Insituform-Germany
Aegion Corp. (Aegion) (Nasdaq Global Select Market: AEGN) has announced that it has sold its 50 percent interest in Insituform Rohrsanierungstechniken GmbH (Insituform-Germany) to Per Aarsleff A/S, a Danish company (Aarsleff).
Insituform-Germany, a company thatwas jointly owned by Aegion and Aarsleff and had 2012 revenues of approximately€72 million, is active in the business of trenchless sewer and waterrehabilitation in Germany, Slovakia and Hungary. The sale price was €14million, approximately US $18.3 million. In connection with the sale,Insituform-Germany also entered into a product supply agreement with Aegionwhereby Insituform-Germany will purchase on an annual basis at least GBP 2.3million, approximately US $3.6 million, of felt cured-in-place pipe (CIPP)liners during the two-year period from June 26, 2013, to June 30, 2015, (theGBP 2.3 million represents the felt liner volume purchased byInsituform-Germany from Aegion in 2012).
Aegion president and CEO J. JosephBurgess said, “The sale of our interests in Insituform-Germany is consistentwith our strategy to optimize Aegion’s product and service mix according to themarket needs of individual countries, thereby seeking to improve the overallreturn of our businesses. The German CIPP contracting market is highlycompetitive and fragmented. As a result, the contracting returns ofInsituform-Germany have languished for a number of years. With thistransaction, Aegion will continue to provide felt CIPP liners toInsituform-Germany until at least June 30, 2015, but also will immediatelymarket Aegion’s glass CIPP liners in Germany, the largest CIPP market inEurope.”
Aegion senior vice president-waterand wastewater Thomas E. Vossman added, “For the year ended Dec. 31, 2012, andthe quarter ended March 31, 2013, Aegion recorded equity earnings/(loss) of$0.9 million and $(0.3) million, respectively, from Insituform-Germany’soperation. In addition, Aegion recorded approximately $0.9 million in royaltyincome from Insituform-Germany in 2012. This transaction divests anunderperforming business unit and will allow Aegion to focus its resources andefforts on higher return businesses and stimulate growth of third-party productsales in Europe.”
The transaction is expected toresult in a pre-tax gain on sale of investment of approximately US $11 millionto 12 million.
