Eddyfi Technologies, a Quebec-based developer of high-tech equipment that detects damage and defects in metals, has bought a global pipeline inspection company in a deal that will see it become a direct service provider to energy transporters.
Privately held Eddyfi, backed by Caisse de dépôt et placement du Québec, has acquired NDT Global, which is based in Dublin and has major operations in Stutensee, Germany. The combined company, called Eddyfi/NDT, will have 1,000 employees in 20 offices around the world.
The companies did not give a price of the deal, but Eddyfi said it raised more than $600-million in debt and equity financing to complete the acquisition and to pursue other opportunities. This is the latest of several acquisitions for the company since it was founded a decade ago.
Brossard, Que.-based Novacap LP invested $163-million into the operation, marking the private-equity firm’s first stake in the company. The Caisse added to its investment by $107-million. These injections mean that management and employees, Caisse and Novacap each own about a third of the combined operation, said Martin Theriault, its chief executive.
The company has offered a range of non-destructive testing and analysis technology, including sensors, hardware, robotics and software, for owners and service providers in energy, mining, power generation, transport and aerospace. Non-destructive testing is used to evaluate the integrity of materials such as metal without causing damage.
Its prospects have been limited, however, as selling the gear to other service providers is a niche market, partly because those companies often employ their own technology in their inspection tools, Mr. Theriault said in an interview. The acquisition changes that.
“In some segments we’re not going to just sell equipment, we’re going to sell a service with our equipment and it’s got the merit of being more repeatable, recurring,” he said.
In-line inspection tools run inside onshore and offshore pipelines and gather data on any weaknesses, deformities or corrosion cracking that affect the integrity of the steel and cause ruptures and spills.
“So by us entering into that segment, we’re able to put our technologies with an established player and hopefully upgrade the technology to find new problems and create value for ourselves and our clients,” he said.
Caisse, the public pension-fund manager with net assets of about $327-billion, made its initial investment in Eddyfi three years ago and has assisted the company as it completed four acquisitions in Europe and North America. In a release, it said it has backed Eddyfi’s new strategic plan that includes the move into more service delivery.
Novacap, meanwhile, will assist Eddyfi with mergers and acquisitions, financing and, sometime in the future, a possible initial public offering, Mr. Theriault said.
The deal comes amid a busy time for Novacap and Caisse. In December, the duo invested $358-million to increase their stakes in payments technology provider Nuvei Corp. Last month, Novacap-backed furniture maker Bestar Inc. bought U.S. rival Bush Industries Inc. for more than US$150-million. Novacap also sold its controlling stake in medical imaging software firm Intelerad Medical Systems Inc. for more than $650-million.
Last week, the Quebec government named former Bank of Nova Scotia investment banker Charles Émond as the Caisse’s CEO, replacing Michael Sabia, who held the job for a decade.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.