Aegion Corporation (“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, Aegion’s President and Chief Executive Officer commented, “The sale of our interests in Insituform-Germany is consistent with our strategy to optimize Aegion’s 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 Aegion’s glass CIPP liners in Germany, the largest CIPP market in Europe.”
Thomas E. Vossman, Aegion’s 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-Germany’s 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.”
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