The acquisition of the company NDT Global allows the Quebec company Eddyfi to more than double in size and to seriously think about an IPO in 3 to 5 years.
Eddyfi specializes in “non-destructive testing” using probes, devices and software for the inspection of critical components, particularly in the petroleum industry (pipelines and oil platforms), aerospace and nuclear.
Last week, Eddyfi announced the purchase of NDT Global for “between $ 400 and $ 500 million” with the help of the Caisse de depot et placement du Quebec and the Novacap investment fund.
NDT Global, which specializes in pipeline inspection, has 530 employees, 220 in Germany, 30 in Ireland, 50 in Barcelona, 100 in Houston, 140 in Mexico and 50 in Canada. These jobs are in addition to Eddyfi’s 460, allowing Quebec society to cross the symbolic bar of 1,000 workers, “including a few hirings”, in 20 offices around the world. Eddyfi / NDT serves customers in 110 countries.
Eddyfi CEO Martin Thériault says the acquisition will allow Eddyfi to also offer the services that come with its products: “Before, we weren’t doing any inspections. We were just selling the tools so other companies could do it. The opportunity behind this acquisition is to send our tools to NDT Global and improve the quality of tools and inspections, “he said.
The leader claims that Eddyfi’s technology is “several years ahead of NDT’s.” He adds that the company, by integrating its products into specialized tools, ultimately wants to “deliver the most advanced inspections in the world”.
Towards an IPO
Eddyfi achieved his goal of generating $ 100 million in annual revenue in his 2019 fiscal year, which ended in September, a year earlier than expected. Today, Martin Thériault says he targets annual sales of $ 500 million within 3 to 5 years.
In order to finance his ambitions, Eddyfi could turn to the stock markets.
“An IPO is a very strong possibility, given our size and the opportunities it generates, but above all I want Eddyfi to remain a Quebec flagship. For me, the goal is to keep the company sustainable in Quebec, rather than being bought by a foreign company, “said Martin Thériault, the company’s CEO, in an interview.
Mr. Thériault suggests that an IPO could also occur more quickly if the pace of acquisitions and growth lends itself to it.
To finance its most recent acquisition, Eddyfi / NDT completed a $ 600 million round of financing, including investments of $ 163M from Novacap and $ 107M from Caisse de depot. A banking syndicate led by the National Bank of Canada and a loan from Investissement Québec made it possible to complete the transaction.
Eddyfi says he keeps an amount to explore other “strategic opportunities.” Mr. Thériault has no intention of stopping there and says he has a “list of potential acquisitions.” He says he wants to target primarily companies that will allow Eddyfi to seek specialized products that will allow the company to improve its technologies and its competitive position.