Xebec Holding USA Inc, a wholly-owned subsidiary of Xebec Adsorption Inc., has entered into an agreement effective July 31st, 2020, to acquire all of the outstanding securities of Enerphase Industrial Solutions, Inc. (doing business as “Air Flow”). Air Flow’s principals will remain with Air Flow after the acquisition to optimize their integration into Xebec’s industrial service and support business and to grow the operation over the coming years.
Total consideration payable by Xebec is approximately $6.0M, subject to certain holdbacks, adjustments and time-based payments. Air Flow had revenues of approximately $10.1M for the fiscal year ended December 31, 2019 and revenues are estimated to grow organically to $11.5M in 2020 with an EBITDA margin of approximately 10%. Xebec expects that Air Flow’s growth and profitability could be improved with additional supply chain and cost optimizations, product synergies and the back-office expertise Xebec has built from prior acquisitions.
“When Xebec approached us, we saw a unique opportunity to be part of a mission that was larger than us. Climate change is a growing concern and I saw how our team and experience in compressed air service could translate into being a strong value add to help service and support Xebec’s upcoming renewable natural gas and hydrogen systems. North Carolina is one of the top 10 agriculture producing states which represent significant potential for RNG projects. Air Flow is well positioned with three points of presence to offer truly local support to future dairy and hog farmers, municipalities, and industry,” states B. Stanton Shelton, III, President and CEO, Air Flow.
“As renewable natural gas and hydrogen adoption continues, the need to support customers over the lifetime of their installations grows. Air Flow is yet another example of an acquisition that is immediately accretive to Xebec’s earnings and the service team at Air Flow can be trained to also work with renewable gases. Growing our service footprint is key to the Xebec’s strategy to sell more Cleantech systems, better support our customers and capture more aftermarket business. I’m happy to see the continued execution by our team and we expect several more acquisitions throughout the rest of the year,” says Dr. Prabhu Rao, Chief Operating Officer, Xebec Adsorption Inc.