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Cayman’s Consolidated Water becomes 100% owner of Aerex Industries

Cayman Islands-based Consolidated Water Co Ltd last Wednesday announced the purchase of a 49 per cent stake in Florida-based Aerex Industries.

The Abel Castillo Water Works plant in Governors Harbour, Grand Cayman, is one of Consolidated Water Co’s seven plants that produce piped drinking water in the British Overseas Territory. (Photo: Consolidated Water)

“Consolidated Water Co Ltd, a leading developer and operator of advanced water supply and treatment plants, has exercised its option to purchase, through its wholly owned subsidiary, Consolidated Water US Holdings, the remaining 49 per cent interest in its subsidiary, Aerex Industries, for $8.5 million,” a statement from the company read.

With the finalisation of the purchase on January 24, Consolidated Water became 100 per cent owner of Aerex Industries.

Terms of agreement

Based on terms of the agreement to purchase Aerex, Consolidated Water exercised its option to compel Aerex’s minority shareholder, Thomas Donnick, to sell his 49 per cent ownership interest to the Cayman-based company. Equally, Consolidated Water also granted Donnick the option to compel Consolidated Water to purchase his 49 per cent ownership interest.

CEO, Consolidated Water Rick McTaggart
(Photo: Cayman Compass)

The terms set out that both companies agree on the fair market value for Aerex at the time they decide to exercise their respective options. The options became exercisable effective February 2019.

Changing the top

As a result of the exercise of options and the close of transactions, Donnick resigned his position as president of Aerex Industries. He will, however, continue to provide consultancy services to the company.

In his stead, Jason Carlson — the former vice-president of Aerex and recently appointed vice-president of manufacturing at Consolidated Water — will oversee the expansion of Aerex’s operations.

According to Rick McTaggart, CEO, Consolidated Water, “Tom has been an excellent business partner since we invested in Aerex nearly four years ago, and we’re glad we can continue to benefit from his vast industry experience as a consultant to the company.

Commenting on the appointment of Carlson, McTaggart said, “Jason has been an outstanding member of Aerex’s team for more than 11 years and we are confident he will continue to excel in his new position as president.”

Plans for Aerex

Headquartered in Fort Pierce, Florida, Aerex is a custom and specialty manufacturer of water treatment-related systems and products. It also provides design, engineering, management, operating and other services applicable to commercial, municipal and industrial water production.

“Since our initial acquisition of 51 per cent of Aerex in February 2016, we have strengthened Aerex’s capabilities and resources and expanded its product offerings, which has resulted in improving results.”

— Rick McTaggart, CEO, Consolidated Water Co Ltd

For the nine-month period ended September 30, 2019, Aerex reported revenue of approximately US$10.5 million. From this amount, the company generated a net income of approximately US$2.0 million.

Aerex, however, reported a net loss of US$147,906 at year-end December 31, 2018, from revenue approximating US$7.3 million.

Consolidated Water’s board of directors (standing, from left) Leonard J Sokolow, Brian E Butler, Raymond Whittaker, Richard Finlay, Clarence B Flowers, (seated, from left) Frederick W McTaggart, Linda Beidler-D’Aguilar, Carson K Ebanks, and Wilmer F Pergande.
(Photo: Consolidated Water)

“Since our initial acquisition of 51 per cent of Aerex in February 2016, we have strengthened Aerex’s capabilities and resources and expanded its product offerings, which has resulted in improving results,” McTaggart pointed out.

“Given our expectations for this business, we deemed this an opportune time for us to exercise our call option for the remaining ownership. We expect this to contribute to increasing shareholder value in the coming years.”