LUDINGTON — A Pittsburgh-based water solutions provider has signed a definitive agreement to acquire the ProAct Services Corp. for $132 million.
The deal with Evoqua Water Technologies Corp. (NYSE: AQUA) will expand the company’s existing service offerings and make Evoqua a “one-stop shop” for customers.
ProAct Services, a provider of on-site treatment services for contaminated water, was owned by Indianapolis-based private equity firm Hammond, Kennedy, Whitney & Company Inc. and several members of the ProAct’s management team.
According to executives at Evoqua, the company plans to use the deal to accelerate growth in its industrial business.
“The plan … is contingent around growth,” Kevin Lowery, the director of corporate communications for Evoqua, told MiBiz. “It’s about growth synergies — the ability to take that business and … plug it into our system, and we think it can bode well for our growth.”
The deal is contingent on regulatory approval from the U.S. Department of Justice and other closing conditions.
ProAct Services generated approximately $54 million in revenues and had adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $12 million for the 12-month period that ended March 31, according to a statement.
Evoqua plans to finance the transaction with a $150 million first lien term loan. For the company, the deal will expand its environmental solutions offerings and “service capabilities in mobile/temporary process water and wastewater treatment, hydrostatic water treatment, and coal-ash-pond remediation,” according to Lowery.
“The addition of their 900 mobile assets using remote-monitoring technology enhances Evoqua’s ability to be a ‘one-stop shop’ for customers that are looking for temporary and mobile water treatment solutions,” he said.
Evoqua also has a presence in West Michigan. One of the company’s largest manufacturing facilities is in Holland, where it manufactures a variety of water treatment equipment for numerous industries ranging from chemical manufacturing and heavy industrial applications to food processing.
The deal follows an announcement last November in which ProAct Services said it planned to invest $18.6 million to build a new corporate headquarters in Pere Marquette Charter Township, according to a report in the Ludington Daily News. At the time of the story, ProAct Services founder Frank Smiddy said the business expansion would lead to 30 new jobs over the next three years.
Smiddy, who did not respond to comment before this story went to press, told the LDN in 2017 that the company had “already begun hiring people.”
Under the new ownership, the company will continue its operations in Ludington and will use the space to grow its industrial segment out of ProAct’s new Ludington headquarters, Lowery said.
ProAct currently employs about 180 people nationwide.
“We are enthusiastic to join the Evoqua team,” ProAct Services CEO Gerard Smiddy said in a statement. “Not only are our businesses complementary, but so is Evoqua’s commitment to safety, growth, and helping its customers and partners to succeed.”