Water Intelligence (LSE:WATR) has agreed to reacquire its franchise in southern Alabama for $4.7m in cash, bringing the fast-growing territory back under its core American Leak Detection (ALD) subsidiary.
The London-listed group, which provides wireless monitoring, leak detection, repair and aftercare services for water management, said the deal is expected to be immediately accretive. The price is based on the franchise's trailing twelve-month performance of $2.15m in revenue and $815,000 in adjusted EBITDA.
Of the $4.7m purchase price, $2.5m is payable at completion, with the remainder staggered through 2029.
Franchise owner Ryan Speir will join ALD's management team as Vice President for the Southeast US, receiving stock options priced 10% above the market price at completion as an incentive to accelerate growth across corporate and franchise locations in the region.
"He has built a strong growth business already and has helped various franchise and corporate locations grow through his leadership in providing a range of repair solutions and aftercare beyond our core minimally-invasive leak detection services," said Will Knell, chief executive of American Leak Detection.
The company said Alabama is benefiting from US demographic shifts and outpacing national growth, and that Speir will help roll out wireless monitoring linked to its service footprint.
Executive chairman Dr Patrick DeSouza said the strengthened management team positions the group to expand its paid pilots with national customers, adding that the company "will continue to supplement such new sources of growth through franchise acquisitions that bring further revenue and profit growth from our range of core offerings."