Xebec Acquires Tiger Filtration to Leverage Recurring Element and Filter Manufacturing Platform for Renewable Gases
Xebec Adsorption (TSX: XBC) has acquired UK-based Tiger Filtration for £12 million ($20.6 million CAD), enhancing its aftermarket business for filtration products. TFL reported revenues of £2.7 million ($4.6 million CAD) with a notable EBITDA margin of 42% for FY2020. This acquisition is expected to create immediate cost savings and increase revenue through existing sales networks. The move aligns with Xebec's strategy to transition into a service-oriented business focused on renewable and low carbon gases.
- Acquisition of Tiger Filtration provides Xebec with a profitable aftermarket business.
- Expected immediate cost savings by replacing purchased parts with in-house products.
- TFL's strong EBITDA margin of 42% and net income margin of 34% enhances financial performance.
- Expansion into hydrogen and renewable natural gas markets through TFL's R&D capabilities.
- Total acquisition cost is significant at £12 million ($20.6 million CAD), which may strain financial resources.
- Profitable aftermarket business with capabilities for hydrogen and renewable natural gas replacement parts -
MONTREAL, June 14, 2021 (GLOBE NEWSWIRE) -- Xebec Adsorption Inc. (TSX: XBC) (“Xebec”), a global provider of clean energy solutions, is pleased to announce that on June 11, 2021, it has closed the acquisition of all the outstanding shares of United Kingdom based Tiger Filtration (“TFL”). The acquisition of TFL will provide Xebec with a very profitable and recurring aftermarket manufacturing business for elements and filters. TFL’s R&D capabilities will also allow for expansion of its product portfolio to include filtration products for hydrogen and renewable natural gas (RNG).
Founded in 2004 by former Walker Filtration employees (Bob Thompson, Gary Ashton and Matthew Rowe), TFL has gained worldwide recognition for providing high-quality alternatives for the compressed air and gas industry. TFL was established 17 years ago and has become an internationally active company with worldwide sales. Two of its principals will retire and Gary Ashton will remain with TFL as Managing Director and continue his leadership in sales and business development.
“We started TFL almost two decades ago and are happy to be handing over the company to Xebec, a company with a clear focus on clean technologies. I am particularly proud of the efficient manufacturing platform that we’ve created and that can successfully compete with the compressed air & gas multinationals. I believe that TFL will enable Xebec to not only capture immediate sales and costs synergies but also help create products for the energy transition, as our knowledge will facilitate the development of filter products for hydrogen and RNG,” said Gary Ashton, Managing Director, Tiger Filtration.
Total consideration payable by Xebec is
“TFL provides Xebec with a unique opportunity to vertically integrate into the valuable aftermarket business for filters and elements. The acquisition will be immediately accretive and bring TFL’s products to our service subsidiaries which will be leveraging our sales and distribution networks to increase revenues. Ultimately, the acquisition positions us well as we look to transition from being predominantly an equipment supplier to a support and service-oriented organization with recurring revenue streams for renewable and low carbon gases,” stated Kurt Sorschak, Chairman, CEO and President of Xebec Adsorption Inc.
About Tiger Filtration
Established in 2004, Tiger Filtration is an independently owned British based company specialising in the manufacturing of high-quality alternative in-line filter elements, vacuum pump separators, compressor air & oil separators, high-pressure stainless-steel filter housings and bespoke filtration solutions. Tiger’s products are supplied from its 14,000 sq ft facility in Sunderland, UK and sold globally to customers ranging from small businesses to international organisations who expect quality products and an exceptional level of service.
Related links:
https://www.xebecinc.com
https://www.tigerfiltration.com
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Public Relations for Xebec
Victor Henriquez, Senior Partner
victor@publicsc.com
+1 514.377.1102
Investor Relations:
Xebec Adsorption Inc.
Brandon Chow, Director, Investor Relations
bchow@xebecinc.com
+1 450.979.8700 ext 5762
About Xebec Adsorption Inc.
Xebec is a global provider of clean energy solutions for renewable and low carbon gases used in energy, mobility and industrial applications. The company specializes in deploying a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen and nitrogen. By focusing on environmentally responsible gas generation, Xebec has helped thousands of customers around the world reduce their carbon footprints and operating costs. Headquartered in Québec, Canada, Xebec has a worldwide presence with six manufacturing facilities, eight Cleantech Service Centers and five sales offices spanning over four continents. Xebec trades on the Toronto Stock Exchange under the symbol (TSX: XBC). For more information, xebecinc.com.
Cautionary Statement
This press release contains forward-looking statements within the meaning of applicable Canadian securities law. These statements relate to future events or future performance and reflect the expectation of Management regarding the growth, results of operations, performance and business prospects and opportunities of the Corporation or its industry. Forward-looking statements typically contain words such as “believes”, “expects”, “anticipates”, “continues”, “could”, “indicates”, “plans”, “will”, “intends”, “may”, “projects”, “schedules”, “would” or similar expressions suggesting future outcomes or events, although not all forward-looking statements contain these identifying words. Examples of such statements include, but are not limited to, statements concerning: (i) expected cost savings that the acquisitions may provide in the future; and (ii) the Corporation’s belief it will capture increased sales and cost synergies noted in this press release.
These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties that may cause the Company’s actual results, level of activity or performance to be materially different from any future results, levels of activity or performance expressed in or implied by these forward-looking statements. These risks include, generally, risks related to revenue growth, operating results, industry and products, technology, competition, the economy, the sufficiency of insurance and other factors which are discussed in greater details in the most recent quarterly management discussion ana analysis (“MD&A”) and in the Annual Information Form of the Corporation filed on SEDAR at www.sedar.com.
Forward-looking statements contained herein are based on a number of assumptions believed by the Corporation to be reasonable as at the date of this press release, including, without limitations, assumptions about trends in certain market segments, the economic climate generally, the pace and outcome of technological development, the identity and expected actions of competitors and customers, the value of the Canadian dollar and of foreign currency fluctuations, interest rates, the anticipated margins under new contracts awards, the state of the Corporation’s current backlog, the regulatory environment, the sufficiency of internal and disclosure controls, the ability of the Corporation to successfully integrated acquired business, and the acquisition and integration of businesses in the future. If these assumptions prove to be inaccurate, the Corporation’s actual results may differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements contained herein are made as of the date of this MD&A and are expressly qualified in their entirety by this cautionary statement. Except to the extent required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein. Readers should not place undue reliance on forward looking statements.
Non-IFRS Measures
This press release refers to financial measures that are not recognized under International Financial Reporting Standard (“IFRS”). A non-IFRS financial measure is a numerical indicator of a company's performance, financial position or cash flow that excludes or includes amounts or is subject to adjustments that have the effect of excluding or including amounts that are included or excluded in most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning under IFRS and therefore are unlikely to be comparable to similar measures presented by other companies having the same or similar businesses.
The Corporation believes these measures are useful supplemental information. The following non-IFRS measures are used by the Corporation in this press release: EBITDA, EBITDA margin.
Please find below definitions of non-IFRS financial measures used by herein:
“EBITDA” means the earnings before interest, income taxes, depreciation and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income.
“EBITDA margin” being EBITDA as a percentage of revenues.
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