Water Intelligence (WATR) , a provider of water leak detection and related services, has announced the successful reacquisition of its franchise in West Covina, California. This development falls under the umbrella of the company's American Leak Detection subsidiary.
The transaction was completed for a sum of $1.5 million in cash at closing, and encompasses all essential assets required to facilitate operations, such as trucks and equipment.
The acquisition's strategic significance lies in West Covina's proximity to Los Angeles, which should support growth through synergies with neighboring operations. The deal reinforces the group's strategy of establishing regional corporate hubs in the US that fuel growth in adjacent corporate and franchise locations. West of the acquisition territory are several significant franchises stretching from San Diego to Los Angeles, and east of the acquisition territory are existing corporate operations in San Bernardino and Palm Springs.
The location's adjacency to manufacturing partners facilitates product commercialisation, including innovations like Residential Pulse and IntelliDitch for sewer diagnostics and water channel lining.
Executive Chairman, Dr. Patrick DeSouza commented: "We are pleased with today's reacquisition. Most importantly, it is an accretive transaction with plenty of scope for additional growth. Moreover, the West Covina operation enables various synergies given its strategic location in Southern California near various franchise and corporate locations, as well as its capability to help deliver on our product strategy given its proximity to our manufacturing partner."
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The reacquisition should fuel further growth opportunities for Water Intelligence while furthering its footprint in the US through its subsidiary.
Strong market demand, supported by increased public sector spending forecast in the US, positions Water Intelligence well for continued growth. The Infrastructure Investment and Jobs Act signed in November 2022 authorises $55 billion in spending on water initiatives over the next five years in the US. This should underpin further growth, with the company already establishing itself in this region, having seen US corporate sales increase by 48% to $47.3 million in 2022.
Globally, market demand for Water Intelligence’s services is supported by population growth and climate change, with droughts particularly common in Western US. Adding to this, inefficient water management and overexploitation are also putting stress on water and wastewater industries, with Water Intelligence well positioned to assist.
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