Shares of geothermal energy firm Waterfurnace Renewable (TSX:WFI) are up nearly five dollars today after the company announced it has agreed to be acquired by Sweden’s NIBE Industrier AB.
Under the agreement, which was announced after Waterfurnace’s stock was halted at the open today, shareholders will receive $30.60 in cash, a 27% premium to the average price of the stock over the past thirty-days .
“I believe this is a compelling offer for our shareholders and I am confident that WaterFurnace and its employees have found an excellent strategic partner in NIBE,” said CEO Tom Huntington. “The combined talents of these two fine companies are aimed at helping people around the globe find sustainable energy solutions. As CEO of WaterFurnace and on behalf of my whole team, I can state that we are excited to be joining one of the market leaders in our industry.”
After a string of soft quarters, Waterfurnace, which designs and manufactures geothermal heat pump sand water-source systems, saw its cost cutting measures begin to take hold in 2013, when it produced a record Q1 topline of $29.2 million. That number softened in this year’s first quarter, with management blaming an unusually cold winter for a decline in residential installations.
While geothermal energy has seen slow in growth in recent years, Navigant Research predicts that the geothermal heat pump market will nearly triple to $17.2 billion by 2020, driven by progressive legislation that is more typical of places like Demark, where homes cannot be built with fossil fuel heating.