Water Intelligence Plc Acquisition of Bakersfield, California Franchise
Water Intelligence plc, a leading provider of non-invasive leak detection and remediation services, is pleased to announce the acquisition of its Bakersfield, California franchise. Bakersfield is one of the larger cities in California and a major center for agriculture in the United States. Drought conditions in California make water loss a particularly sensitive issue with respect to agribusiness. Given its characteristics, the area was under-served by the former franchise owner with approximately $180,000 in sales for 2017. The purchase price is $252,000 for the territory, truck and equipment. The Company plans to expand the operations in this territory rapidly given the size of the opportunity.
The Bakersfield acquisition was one of the prospective opportunities discussed in the Company's announcement March 7, 2018 regarding the recent fundraising and acquisition of its Louisville franchise, a much more sizeable business. That prior addition resulted in a regional concentration of corporate locations (along with Indianapolis and Cincinnati) and deeper management leadership in order to support growth of both franchise and corporate operated locations in the Midwest United States. Today's Bakersfield acquisition is more of a turnaround opportunity, but follows the same geographic strategy as Louisville. Bakersfield links current corporate operations in Palm Springs and San Bernardino in order to support franchise and corporate operated locations in Southern California, a region with significant demand for solutions to water loss.
Further, the structure of this acquisition results in a minority investment from the franchise to the north of Bakersfield, which covers the city of Fresno. Mr. Michael Dick, a business leader with expertise in insurance and agribusiness, has built one of the larger franchise operations at American Leak Detection and he will help provide management expertise to grow this significant opportunity in Central California. His managerial experience is value-add beyond his investment because it will provide operational leverage at minimal cost to capitalise on this big opportunity.
Executive Chairman, Patrick DeSouza commented:
"We are excited by the Bakersfield opportunity. This territory was under-exploited by our American Leak Detection franchise operation relative to its geographic size and demand for solutions to water loss. With a critical mass of corporate-operated resources and the added leadership of one of our strongest franchise owners, we see a lot of upside starting immediately. American Leak Detection can now make a difference in an important region for the US economy. Moreover, given the reality of waste as a by-product of agribusiness, and California's leadership on environmental matters, this area will also be an ideal location to develop our newly announced renewables line."