De Mem Ltd (ASX:DEM) is expanding into Australia by acquiring Akwa-Worx, a Queensland based provider of water and waste water treatment systems.
The acquisition will strengthen the Singapore-based water treatment company De.mem’s position in the Asia Pacific region and provides an opportunity for growth in the mining and industrial sectors.
Akwa-Worx currently supplies products for de-centralised industrial and municipal water and waste water treatment in Australia.
The company’s product lines include Ultra Filtration (UF) Reverse Osmosis (RO) based systems, Membrane Bioreactors (MBRs), bioreactors and chemical dosing systems.
The systems are typically delivered as packaged or modular solutions for de-centralised applications.
Akwa-Worx’s clients include a number of leading corporations from the Australian mining sector and its subsidiary’s ongoing long-term maintenance contracts provide a stable recurring revenue component.
The company’s revenues for the 12 months ended 30 June 2017 were circa $7 million including more than $2 million derived from long-term operations and maintenance contracts.
Akwa-Worx’s normalised EBITDA for FY17 was circa $800,000.
The acquisition will result in the combination of De.mem’s innovative membrane technologies with Akwa-Worx’s established position and proven product offering in Australia.
The consideration for the transaction is $1.5 million in cash and $460,000 in De-mem shares, plus milestone shares and cash on crossing pre-set revenue targets for the next two years.