Cemtrex, an advanced security technology and industrial services company, announced that on July 1, 2023, it closed the acquisition of Heisey Mechanical Ltd., a leading service contractor and steel fabricator that specializes in industrial and water treatment markets.
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Located in Columbia, Pennsylvania, Heisey Mechanical is focused on steel fabrication and contracting primarily to the commercial and industrial water treatment industry, as well as other service industries. Heisey provides the water treatment industry with a variety of fabricated vessels and equipment including ASME pressure vessels, heat exchangers, mix tanks, reactors, and other specialized fabricated equipment. Additionally, the contracting team assists with installation and service of fabricated items. The company has over 33,000 square feet of manufacturing floor space in its facility and an experienced staff of fabricators, welders, and field mechanics.
“This first acquisition of an established contractor in a growth market is highly synergistic with our Advanced Industrial Services (“AIS”) subsidiary’s expansion strategy,” said Saagar Govil, Cemtrex Chairman and CEO. “We will build on Heisey Mechanical ’s achievements, enabling us to expand our fabrication capabilities into new markets. Our customer base also broadens into new government and industrial verticals, as well as geographies we are not servicing today.
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“The acquisition brings over $11.6 million in immediately accretive annual revenue and approximately $775K in adjusted EBITDA, when averaged over the last four years, with its client list of commercial and industrial facilities, a seasoned team and extensive manufacturing equipment. As a result of aging infrastructure, increased water scarcity, and stringent EPA rules, the demand for water treatment systems and service is expected to continue to grow. We continue to capitalize on opportunities in our pipeline that drive expanded cash flow from operations, and expect more opportunities down the road,” concluded Govil.
Cemtrex acquired Heisey Mechanical for $2.4 million, with $2,160,000 in cash and a $240,000 seller’s note and the real estate the business occupies is expected to be purchased later in July for $1.5 million. Cemtrex funded the transaction with a $2,160,000 term loan from Fulton Bank, no new shares were issued in connection with this acquisition. The acquisition closed on July 1, 2023, and is expected to be accretive beginning in Q4 FY2023.
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