WaterFurnace Renewable Energy Inc. is being acquired by a Swedish company with more than 10 times its annual sales, officials announced Monday.
Founded in Fort Wayne, WaterFurnace will continue to operate as a separate entity led by the company’s current executives.
NIBE Industrier AB will pay about $350 million cash for all outstanding WaterFurnace shares, a 27 percent premium at the time the bargain was struck. That translates to $30.60 a share in Canadian dollars. WaterFurnace is based in Fort Wayne but trades on the Toronto Stock Exchange.
Shares closed at $30.45 Canadian on Monday, an increase of $5.02 – or almost 20 percent.
WaterFurnace, which makes geothermal heat pumps, reported that about 70 percent of last year’s sales were to the residential market. The company, which manufactures products under the WaterFurnace and GeoStar brands, also sells to the commercial and institutional markets.
The technology relies on an underground grid of pipes. The temperature below ground remains fairly constant year-round, allowing loops buried on homeowners’ properties to capture and circulate cooler air in summer months and warmer air in winter.
Gerteric Lindquist, NIBE’s CEO, said the companies were among the first on both sides of the Atlantic to embrace and market geothermal systems.
More than 1 million geothermal heat pumps are now used in the U.S., with about 50,000 more added each year, according to the company.
NIBE, which sells heat pumps in Europe and Asia, wants to expand its reach into North America and Australia – WaterFurnace territory.
Tom Huntington, WaterFurnace president and CEO, called NIBE’s offer compelling.
The combined talents of these two fine companies are aimed at helping people around the globe find sustainable energy solutions, he said in a statement. As CEO of WaterFurnace and on behalf of my whole team, I can state that we are excited to be joining one of the market leaders in our industry.
The local company’s directors, managers and founders collectively own about 25 percent of WaterFurnace’s stock and have pledged to vote in favor of the sale. At least 67 percent of all shareholders must support the deal for it to go through.
Pending antitrust, regulatory and shareholder approvals, the sale is expected to close in August.