MFRI Inc. has Acquired 100% Ownership of Bayou Perma-Pipe Canada
MFRI Inc. has announced that its Perma-Pipe subsidiary has signed a purchase agreement to acquire 100% ownership of Bayou Perma-Pipe Canada (BPPC).
- (1888PressRelease) January 29, 2016 - NILES, IL - Perma-Pipe is a division of MFRI Inc. (a NASDAQ listed company); MFRI, Inc. is a manufacturer of pre-insulated specialty piping systems for district heating and cooling and other applications. MFRI, Inc. has announced that Perma-Pipe has recently signed a purchase agreement with their joint venture partner Aegion Corporation.
Based on the agreement, Perma-Pipe will have the 100 percent ownership of Bayou Perma-Pipe Canada (BPPC). Bayou Perma-Pipe Canada (BPPC) is an Alberta, Canada-based, Coating and Insulation Company. This ownership will diversify Perma-Pipe's operations in North America and will expand its core competencies. Since 2009, Perma-Pipe has owned 49 percent interest in BPPC, when the joint venture was formed with the Aegion Corporation. This venture was formed to serve the oil and gas industries in Western Canada.
Bradley Mautner, CEO of MFRI Inc. said, "This is a significant step for MFRI, enabling us to take advantage of an opportunity to adjust our business portfolio towards piping, and position ourselves for increased activity in North America. Although conditions in the oil and gas industry are currently challenging and may remain so for some time, BPPC has generated significant revenue from anti-corrosion coating for the western Canadian oil sands markets and is a highly regarded and well-established provider of those products. Also, we believe the acquisition creates an excellent platform for us to expand our insulation business in promising markets such as mining and district heating and cooling and freeze protection for utilities in Northern Canada."
Fati Elgendy, President of Perma-Pipe, stated, "This acquisition gives Perma-Pipe sole ownership of an excellent coating plant that provides Fusion Bonded Epoxy, Three Layer Coat, and other specialty coatings. Equally important, it represents an opportunity to diversify Perma-Pipe's operations in North America and bring our best-in-class insulation offerings to that market. We also plan to use the Canadian plant to serve more competitively the district heating and cooling market in the Northwestern United States." "We are pleased that BPPC's President Randy Zilli together with his management team and employees will join Perma-Pipe. We look forward to continuing to work with this very experienced and accomplished organization to further grow Perma-Pipe," he continued.
This agreement is thus subjected to customary closing conditions, and it is expected to close in the first quarter of the year 2016. The purchase price of this transaction is approx. Nine million dollars. This amount will be paid in cash at the closing, and after the closing, BPPC will get re-named as "Perma-Pipe Canada".
About the Company:
Perma-Pipe Inc. is one of the leading manufacturers of pre-insulated piping systems for District Heating and Cooling in North America. They are the global leaders in pipe line services and have six manufacturing facilities worldwide. They offer products for District Heating and Cooling, Oil and gas, Environmental and Industrial and also provide solutions for Leak Detection system.
They also provide products like pipe-in-pipe containment systems for environmental control of hazardous fluids, subsea oil & gas pipelines and equipment, above and below ground insulated piping systems for industrial applications.
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