Thermal Energy International acquires UK-based GEM

Thermal Energy International has agreed to acquire Bristol based Gardner Energy Management, the manufacturer of the GEM Venturi Orifice Steam Trap

The transaction to purchase all the shares of GEM consists of a base price of GBP2.7 million (approximately CAD5.5 million) payable upon closing, and an amount of up to GBP1.3 million (approximately CAD2.6 million) payable in a combination of cash and shares on an earn-out basis over a three-year period based on the future performance of the GEM business line.

The transaction is expected to close on or before 4 July 2008, subject to financing and regulatory approvals.

"Since integrating the GEM product line into our offerings in North America and China, starting in 2006, Thermal Energy has been very impressed with the product performance and the strong positive response from our customers" said Thermal Energy President and CEO Tim Angus: "Our familiarity with the GEM products and business and the strong synergies between GEM and Thermal Energy made this acquisition a natural progression.

The GEM technology has opened doors for us in North America and China, and been a tremendous value-add to projects involving our other technologies such as Flu-Ace and Dry-Rex," said Mr Angus: "In addition to seeing tremendous global growth for the GEM core business going forward, with over 50,000 GEM traps installed throughout Europe there is an extensive multinational customer base that represents significant cross selling opportunities for other Thermal Energy technologies and solutions".

Tim Gardner, founder and Managing Director of GEM will remain with the company for at least one year, to assist the Thermal Energy management team in overseeing a smooth and seamless integration into a single organisation, serving customers with an expanded solution offering.

"From day one, Thermal Energy has demonstrated its commitment to the success and growth of GEM," said Mr Gardner: "We are confident that Thermal Energy is the company that will take the GEM business line to the next level on a global basis and look forward to completing this transaction and achieving the synergies we both know exist".

Tim Gardner established Gardner Energy Management (GEM), a privately held company, in 1995 in the UK, to manufacture and market the GEM Venturi Orifice steam trap.

The product became immediately successful with orders from the BAA Glasgow Airport and Rosyth Dockyard.

The company won the UK Engineering Council Environmental Award for Engineers in 1998 and the Institution of Chemical Engineers Best New Product award in 1999.

To date, more than 50,000 GEM steam traps have been installed across Europe as a "no-fail" permanent replacement for traditional steam traps.

The GEM traps have been demonstrated to provide significant reductions in the overall cost of steam production with a commensurate reduction in greenhouse gases and other emissions.

More recently, GEM steam traps have been introduced into North America and China with positive results, and these markets represent a significant untapped opportunity going forward.

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