Profire Energy, a technology company which creates, installs and services burner and chemical management solutions in the oil and gas industry, announced its wholly-owned subsidiary, Profire Combustion entered into a definitive agreement to acquire substantially all of the assets of Millstream Energy Products (MEP).
Image: Profire announced acquisition of Millstream Energy. Photo: Image by rawpixel from Pixabay.
The Agreement contains certain customary representations, warranties and covenants. The transaction closed on June 18, 2019.
Millstream Energy Products is a privately-held Canadian company that develops a line of high-performance burners, economy burners, flame arrestor housings, secondary air control plates, and other related combustion components. MEP’s full line of products will be available for sale by Profire’s existing sales team immediately after closing of the transaction. The acquisition is expected to add between USD $1 million to and USD $2 million to the Company’s annual revenues.
“We are excited to announce the acquisition of Millstream Energy Products,” said Brenton W. Hatch, President and CEO of Profire Energy. “With the addition of the MEP product line, we expect to be able to provide our customers with a complete best in class burner management solution while maintaining our historically strong product margins. This is a strategic step in our long-term growth plan, allowing the Company to position itself as the only full solution provider for the Burner Management System industry. The MEP products coupled with the Profire brand and distribution channel should allow us to penetrate a deeper product solution with our existing upstream customers as well as new customers in the upstream, midstream and downstream markets. MEP’s established product supply channel in China should also provide Profire with greater exposure to an already established international supply channel.”
The Company has agreed to pay a total purchase price of USD $2.5 million (CDN $3.3 million) for MEP’s product line, inventory, accounts receivable and payable, debt and other intangibles, including its patents and goodwill. MEP will also receive a 4.5% royalty on proprietary MEP product revenue generated during the next five years. The purchase price is subject to an adjustment based on working capital at closing.
Source: Company Press Release