UGSI.............from GWI
The purchase of Siemens’ chemfeed business has been interpreted by some as a precursor to a mainstream stock listing.
Shares in Underground Solutions – the pipeline rehabilitation and installation specialist quoted on the over-the-counter market in the US – jumped by more than 20% in late July when the company announced that it had acquired the chemfeed business of Siemens Water.
UGSI CEO Andy Seidel’s familiarity with the business from his time at USFilter meant that the deal was something of a no-brainer, and he has drafted in Joe Millen, who formerly ran the Wallace & Tiernan business, to head up the unit.
Although the synergies with UGSI’s fusible PVC pipe business are not immediately obvious, the Siemens acquisition was interpreted by some patient long-term holders of UGSI’s stock as a move to bulk up the revenues of the business ahead of a mainstream stock market listing.
“Our revenue in 2012 is substantially ahead of last year’s first-half following two very busy quarters of project execution,” Seidel revealed in his regular quarterly shareholder letter just days before the Siemens deal was announced. “Strong bookings throughout the first half of 2012 have resulted in the highest backlog in company history, which positions us well for strong third-quarter revenue growth.” UGSI shares were last seen off their highs at $0.15 as GWI went to press.
