Xylem to acquire Pure Technologies

Xylem Inc. has entered into a definitive agreement to acquire Calgary-based Pure Technologies Ltd.  for $509 million.

Pure provides diagnostic and analytics solutions and services based on proprietary technologies to address key water and wastewater infrastructure challenges. The company is a leader in intelligent leak detection and condition assessment solutions for water distribution networks, a rapidly growing market driven by the increasing adoption of digital solutions to improve utilities’ capital and operating efficiency.

“The addition of Pure will strengthen Xylem’s position as a leading provider of intelligent solutions that address the water industry’s most persistent problems,” said Patrick Decker, Xylem president and CEO in a media release.

“Aging infrastructure is a top concern of water utilities around the world, and infrastructure assessment is an attractive, growing market that directly addresses this challenge in a cost-effective way. Pure’s solutions strongly complement the broader Xylem portfolio, particularly our recently acquired Visenti and Sensus solutions, creating a unique and disruptive platform of diagnostic, analytics and optimization solutions for clean and wastewater networks. Pure will also bring greater scale to our growing data analytics and software-as-a-service capabilities. As one company, we will provide customers with even more powerful and innovative solutions enabled by cutting-edge technologies.”

Pure reported consolidated revenue of $126 million and $21 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ending September 30, 2017. Xylem expects to achieve at least $12 million in annual cost synergies within two years of closing. The USD$397 million valuation represents a multiple of approximately 17x 2018 estimated adjusted EBITDA for Pure, or approximately 11x including run-rate cost synergies.

“Throughout Pure’s evolution, we have been committed to delivering innovative and value-added solutions for our infrastructure clients,” said Jack Elliott, President and CEO of Pure. “Following this transaction, as we become part of a larger, global enterprise, we will be even better positioned to make a meaningful impact in solving the world’s most pressing water and infrastructure challenges.”

With headquarters in Calgary, Pure has approximately 500 employees globally with corporate offices in Mississauga, Ontario, and Columbia, MD, as well as regional offices across the U.S., Mexico, Colombia, Australia and China.