Aegion Corporation Announces Sale of Its 50% Interest in German Joint Venture
ST. LOUIS--(BUSINESS WIRE)-- Aegion Corporation (AEGN) (Aegion) (Nasdaq Global Select Market: AEGN) today announced that it has sold its 50% interest in Insituform Rohrsanierungstechniken GmbH (Insituform-Germany) to Per Aarsleff A/S, a Danish company (Aarsleff). Insituform-Germany, a company that was jointly owned by Aegion and Aarsleff and had 2012 revenues of approximately ¬72 million, is active in the business of trenchless sewer and water rehabilitation in Germany, Slovakia and Hungary. The sale price was ¬14 million, approximately US $18.3 million. In connection with the sale, Insituform-Germany also entered into a product supply agreement with Aegion whereby Insituform-Germany will purchase on an annual basis at least GBP 2.3 million, 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 (the GBP 2.3 million represents the felt liner volume purchased by Insituform-Germany from Aegion in 2012).
J. Joseph Burgess, Aegions President and Chief Executive Officer commented, The sale of our interests in Insituform-Germany is consistent with our strategy to optimize Aegions product and service mix according to the market needs of individual countries, thereby seeking to improve the overall return of our businesses. The German CIPP contracting market is highly competitive and fragmented. As a result, the contracting returns of Insituform-Germany have languished for a number of years. With this transaction, Aegion will continue to provide felt CIPP liners to Insituform-Germany until at least June 30, 2015, but also will immediately market Aegions glass CIPP liners in Germany, the largest CIPP market in Europe.
Thomas E. Vossman, Aegions Senior Vice President Water and Wastewater, commented, For the year ended December 31, 2012 and the quarter ended March 31, 2013, Aegion recorded equity earnings/(loss) of $0.9 million and $(0.3) million, respectively, from Insituform-Germanys operation. In addition, Aegion recorded approximately $0.9 million in royalty income from Insituform-Germany in 2012. This transaction divests an underperforming business unit and will allow Aegion to focus its resources and efforts on higher return businesses and stimulate growth of third-party product sales in Europe.
The transaction is expected to result in a pre-tax gain on sale of investment of approximately US $11-12 million.
About Aegion Corporation
Aegion Corporation is a global leader in infrastructure protection, providing proprietary technologies and services to protect against the corrosion of industrial pipelines and for the rehabilitation and strengthening of sewer, water, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures. More information about Aegion can be found on its internet site at www.aegion.com.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The Company makes forward-looking statements in this news release that represent the Companys beliefs or expectations about future events or financial performance. These forward-looking statements are based on information currently available to the Company and on managements beliefs, assumptions, estimates or projections and are not guarantees of future events or results. When used in this document, the words anticipate, estimate, believe, plan, intend, may, will and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Such statements are subject to known and unknown risks, uncertainties and assumptions, including those referred to in the Risk Factors section of the Companys Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on February 27, 2013, and in the Companys subsequent quarterly reports on Form 10-Q. In light of these risks, uncertainties and assumptions, the forward-looking events may not occur. In addition, the Companys actual results may vary materially from those anticipated, estimated, suggested or projected. Except as required by law, the Company does not assume a duty to update forward-looking statement, whether as a result of new information, future events or otherwise. Investors should, however, review additional disclosures made by the Company from time to time in its periodic filings with the Securities and Exchange Commission. Please use caution and do not place reliance on forward-looking statements. All forward looking-statements made by the Company in this news release are qualified by these cautionary statements.
Aegion®, Insituform® and the Aegion® logo are the registered trademarks of Aegion Corporation and its affiliates.
David F. Morris, 636-530-8000
Senior Vice President and Chief Administrative Officer
Source: Aegion CorporationCopyright Business Wire 2013