Friday 19th September 2014
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New Zealand exporter of biogas technology Greenlane Biogas has been sold to a listed UK company for $25 million.
Pressure Technologies said it had bought the business and certain assets of the New Zealand company, which is a global developer and supplier of patented technology for upgrading raw biogas into high purity bio-methane. The deal takes effect from Oct. 1 and involves an initial payment of $12 million and the rest deferred as an earn out over four years.
Greenlane Biogas had a funds injection in March from well-known local investors Tenby Powell and Sharon Hunter with the aim of turning the troubled company around and reclaiming its position as the world leader in the supply of biogas equipment.
The company’s former parent, the Flotech Group, went into receivership in December 2012 owing the ANZ Bank $8.9 million. Some shareholders bought the company from the receivers for $2 million and traded on.
Powell took over as chief executive last November, ahead of the debt package in March, but he said while there was now a good pipeline of orders, the company needed a further cash injection to reach its potential. Originally Hunter Powell Investments had wanted to keep the company in New Zealand hands and considered a public listing of the company at one stage.
Pressure Technologies said the acquisition would complement its subsidiary, Chesterfield Biogas, which has been working with Greenlane Biogas since 2008 under an exclusive licence to sell its technology in the UK. The board intends putting the two companies under a new Alternative Energy division and it expected the acquisition to be earnings positive by the October 2016 financial year.
Greenlane Biogas chairman Rob Fenwick said the deal was the best value for both companies’ shareholders.
The Kiwi company has a strong presence in North and South America and Europe and there were emerging markets in south east Asia and China. It has built around 70 biogas plants including the world’s largest in Montreal, Canada, which was commissioned this month.
Biogas comes from the breakdown of material such as manure and garbage and industrial and household waste.
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