BluMetric Environmental Inc., a well-established environmental consulting and cleantech engineering firm based in Ottawa, has made a significant move into the U.S. and Caribbean water markets with its latest acquisition. On September 24, 2024, the company announced it had acquired Gemini Water, a Florida-based company specializing in large-scale desalination and wastewater treatment systems. This acquisition marks BluMetric’s entry into new territories and strengthens its cleantech water portfolio.
The deal, which was finalized through a membership interest purchase agreement signed on September 23, 2024, saw BluMetric purchase 100% of Gemini Water’s interests for a total of US$5.05 million. To fund the acquisition, BluMetric made an initial payment of US$3 million (approximately CA$4.1 million), using its available working capital and operating line. Additionally, BluMetric issued 2.35 million of its common shares to Gemini Water’s parent company, GSWS Holdco Inc., as part of the agreement. The remaining US$1.05 million will be paid over the next three years, contingent on the achievement of specific performance targets such as revenue growth and gross margin. Notably, if Gemini exceeds US$7 million in annual revenue, an additional US$50,000 per million in excess revenue (up to US$3 million) could be paid to GSWS.
Gemini Water, founded in 2015 and headquartered in Gainesville, Florida, has become a leader in the design, construction, and installation of membrane-based water treatment systems. The company operates 22 facilities across the Caribbean and Texas, processing up to seven million gallons of water per day. For the fiscal year ending June 30, 2024, Gemini’s unaudited revenues stood at around US$7.3 million (CA$9.8 million), with healthy EBITDA margins exceeding 10%. The company is also currently working on a major desalination project in St. Kitts and Nevis, with a contract value of US$9.3 million (CA$12.5 million) set for completion by the end of 2025.
“Today we progress our long-term growth strategy by expanding our cleantech product line and geographic footprint into the U.S. and Caribbean markets,” said Scott MacFabe, CEO of BluMetric. “This acquisition improves our market accessibility by covering a combined population almost ten times the size of Canada’s in regions that are significantly more water stressed. Gemini Water has developed an impressive solution for managing water shortages within complementary customer verticals from private developments, and government infrastructure to the leisure market supporting resorts and international cruise lines.”
BluMetric sees multiple strategic benefits from this acquisition. First, it opens up opportunities to serve new industrial and commercial clients, helping to balance out longer sales cycles typically seen in the military sector. BluMetric also aims to leverage its expertise to enhance Gemini’s offerings, while the acquisition provides a foothold for potential future U.S. manufacturing efforts. With a growing order backlog, the deal is also expected to give Gemini the resources it needs to meet increasing demand.
Importantly, this acquisition is a straightforward transaction between two unrelated parties, and the share issuance will not create any new significant shareholders. No finder’s fees were involved in the deal.
Additionally, as part of its ongoing efforts to reward and retain top talent, BluMetric’s Board of Directors has granted 150,000 stock options to one of its executives. These options, effective as of September 24, 2024, will vest over two years and can be exercised at a price of $0.60 per share within the next seven years.
This acquisition underscores BluMetric’s continued focus on growth and diversification, particularly in the cleantech water sector. With Gemini Water now part of its portfolio, BluMetric is well-positioned to expand its reach and capitalize on the growing demand for sustainable water treatment solutions across North America and the Caribbean.