NILES, Ill.--MFRI, Inc. (NASDAQ: MFRI) has announced the formation of a new joint venture, Bayou Perma-Pipe Canada Ltd., a partnership between the Bayou Companies, Inc., (a subsidiary of Insituform Technologies, Inc., NASDAQ: INSU) and Perma-Pipe, Inc., (a subsidiary of MFRI, Inc.). Bayou Perma-Pipe Canada Ltd. has reached an agreement with Garneau, Inc. to acquire Garneau's Camrose pipe coating and insulating facilities in Alberta, Canada for $12.25M (CAN). The transaction is subject to approval by Garneau's shareholders and other customary conditions.
With over 40 years of operating experience, Garneau has developed significant expertise and innovative technology in their pipe coating and insulating processes. The Camrose facility, constructed in 1997, was upgraded in 2007 and includes over 75,000 square feet of space on a 128 acre site. Garneau's shareholders are expected to vote on October 28, 2009 and the closing is expected to occur shortly thereafter. The agreement has been approved by its Board of Directors. This new joint venture company, Bayou Perma-Pipe Canada, Ltd., should have only a minor impact on MFRI earnings for the current fiscal year and is anticipated to be accretive in 2010 (Fiscal Year Ending 1/31/2011).
Bayou, Perma-Pipe's joint-venture partner, has the largest pipe coating and logistics facility on the United States gulf coast. Bayou and Perma-Pipe along with Cumming Corporation have been partners in Bayou Flow Technologies ("BFT') for almost 10 years. BFT markets subsea flow assurance products and services to the oil companies operating in the Gulf of Mexico.
Fati Elgendy, president of Perma-Pipe said, "This investment is a strategic step for our Company. Participating in a coating and insulating facility in Western Canada allows us to better serve our customers in the oil sands and other Canadian energy developments.'
Brad Mautner, President of MFRI said, "Our long history with Bayou has been very successful. We have demonstrated that joining our experience together to supply high quality coating and insulation solutions provides excellent value to our customers. Bringing these skills closer to the Canadian market significantly improves this value proposition.'
Perma-Pipe, Inc. is a manufacturer of pre-insulated district heating and cooling piping systems in North America. Perma-Pipe also offers pre-insulated products for subsea oil and gas gathering, LNG terminals and long distance chemical and petroleum pipeline transportation. Perma-Pipe operates manufacturing plants in Lebanon, Tennessee; New Iberia Louisiana, Mundra India and Fujairah UAE. More information about Perma-Pipe can be found on its internet site at www.permapipe.com.
MFRI, Inc. is a multi-line company engaged in: pre-insulated specialty piping systems for oil and gas gathering, district heating and cooling and other applications; custom-designed industrial filtration products to remove particulates from dry gas streams; industrial process cooling equipment to remove heat from molding, printing and other industrial processes; and installation of heating, ventilation and air conditioning for large buildings. More information about MFRI can be found at its internet site at www.mfri.com.
Bayou was acquired by Insituform Technologies, Inc. in February 2009. Bayou is a leading provider of cost-effective solutions to onshore and offshore energy and infrastructure companies primarily in North America and the Gulf of Mexico. Bayou's products and services include internal and external pipeline coating, lining, weighting and insulation. Bayou also provides specialty fabrication and services for offshore deepwater installations, including project management and logistics. More information about Bayou can be found on its internet site at www.bayoucompanies.com.
For a complete version of the BUSINESS WIRE press release: http://www.businesswire.com/news/home/20091012005755/en
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