OTTAWA, ONTARIO — Thermal Energy International Inc., a global provider of industrial and institutional energy efficiency solutions, announced June 29 that it has acquired all of the outstanding shares of privately held Boilerroom Equipment Inc. (BEI) based just outside of Pittsburgh, PA.
This acquisition is part of the Therman Energy's strategy to develop a broad portfolio of thermal energy efficiency solutions targeted at the industrial, institutional and commercial markets and become a unique one-stop-shop for all of its clients' thermal energy efficiency and heat recovery needs, whether they need heat recovery for thermal, electrical, drying, cooling or other process needs.
The purchase price is U.S. $2.25 million, plus earn-out consideration of up to U.S. $350,000 if certain growth and performance targets are achieved over the next three years. Thermal Energy has received a term loan in the principal amount of U.S. $2.25 million from BDC Capital Inc., a wholly owned subsidiary of the Business Development Bank of Canada to fund the transaction.
Based in Export, PA, BEI engineers and manufactures the HEATSPONGE brand of indirect contact heat recovery units for use in both commercial and industrial steam and hot water applications.
The acquisition of BEI is expected to provide Thermal Energy with the following immediate benefits:
- Expanded complementary product offering to include indirect contact heat exchangers
- Increased distribution network, providing access for all Thermal Energy's current offerings to over 40 independent reps covering the U.S. as well as an established and direct boiler OEM sales channel
- Expansion into the much larger commercial buildings and hot water boilers markets
- Proprietary, scalable automated proposal development software, "BRUCE"
- Sales, marketing, engineering, and project management expertise and efficiencies with scalable operating platform
- Vertical integration of an ASME code fabrication facility in the United States allowing for the potential future GEMTM finishing and stocking and the ability to build FLU-ACE towers
"The addition of BEI supports our growth strategy by expanding our team, distribution and product offering," said William Crossland, CEO of Thermal Energy. "This makes Thermal Energy the only known global supplier of direct and indirect contact heat recovery systems. In the past, these two options have competed against each other, but now Thermal Energy has brought them together. As the global market moves more towards sustainability, the effective use of waste heat becomes paramount. Whether waste heat is used directly at the client site, or used to produce cooling or electricity at neighbouring sites, the market for waste energy is extensive. With this acquisition, we are uniquely positioned to take advantage of this existing trend. In this way, this transaction brings together two very complementary organizations and is expected to add shareholder value through increased sales and earnings. We also expect to benefit from BEI's strong U.S. distribution network and established boiler OEM relationships. Similarly, there is potential for further growth using Thermal Energy's global footprint to accelerate the deployment of BEI's technologies. We are already very familiar with, and impressed by, BEI's products, having integrated them into several of our projects over the years."
"We are extremely pleased to be a part of Thermal Energy International," added BEI co-founder and president Vincent Sands P.E. "While I am very proud of the company we founded and built, we recognized that for BEI to achieve everything it is capable of would require partnering with a larger organization that can provide the resources BEI needs. It is my strong opinion that our HEATSPONGE line of steam boiler economizers represents the most advanced technology available to the global heat recovery market. Our SIDEKICK and RAINMAKER technologies have the potential to reshape the hydronic boiler market unlike any product since the development of the condensing boiler. We have invested over three years seeking the ideal acquisition partner and could not be more pleased in becoming a part of Thermal Energy. There is a real synergy between their direct contact and our indirect contact approach to heat recovery. Having supplied heat exchangers to Thermal Energy for years will make integration much smoother because of the established relationships. Most importantly, they share my passion to establish HEATSPONGE as the global leader in indirect heat recovery, which is going to make the next few years very exciting."
The acquisition expands Thermal Energy's complementary product offering to include BEI's indirect contact heat recovery products, which are scalable and customizable with minimal additional engineering. In addition to large industrial and institutional applications, these products are well-suited for the commercial market as well as smaller industrial and institutional sites that are not currently cost-effective for Thermal Energy's FLU-ACE heat recovery systems.
The acquisition also provides Thermal Energy with access to an engineered products distribution network of independent manufacturers' representatives in the United States, Canada and parts of South America, as well as an established direct sales channel to boiler equipment manufacturers.
BEI's annual sales in each of the last two years was approximately U.S. $1.8 million.