Geospace Technologies (GEOS) Acquires Advanced Water IoT Technology Company Aquana, LLC

Geospace Technologies (NASDAQ: GEOS) today announced that it has acquired 100 percent of the outstanding shares of Aquana, LLC, a comprehensive wireless water monitoring and control system provider. Under terms of the agreement, Aquana will operate as a wholly owned subsidiary of Geospace Technologies. The Company intends to retain Aquana’s employees, further strengthening Geospace’s highly skilled technical workforce. Terms of the transaction include an initial cash payment of $1.4 million at closing, subject to adjustment, and additional contingent cash payments over a six-year earn-out period. The contingent cash payments will be derived from revenues generated during the earn-out period from products and services sold by Aquana, LLC.

Founded in 2017, Aquana provides a leading Internet of Things (IoT) water management platform that delivers remote shut-off valve control, remote AMI meter reading, as well as leak and burst protection for municipal water utilities, multi-dwelling properties, and commercial buildings. Aquana combines connected smart valve hardware with cloud-based software in a Software as a Service (SaaS) recurring revenue model.

Rick Wheeler, CEO and President of Geospace Technologies, said, “Building upon Geospace’s deep technology focus and targeted business diversification strategy, I’m pleased to announce the acquisition of Aquana. Aquana’s premier IoT platform offers multifunctional, modular, and enterprise-ready solutions serving the rapidly growing property management and water utility markets. Fully complementary to our existing products and market expertise, Aquana’s state-of-the-art systems incorporate sensors, are Internet connected, and use configurable algorithms to help clients maximize revenue, limit costs, and mitigate water damage.”

Steve Askew, CEO of Aquana, LLC, said, “We are excited to join the Geospace team. Backed by Geospace’s decades of technology development, manufacturing, and extensive customer service, Aquana can better serve our customers, scale more rapidly, and develop new products. Moreover, property managers and water utility operators alike will be able to deploy intelligent leak detection and remote disconnect capabilities to provide more benefits to consumers and tenants.”

Aquana’s leak detection systems serve a valuable role in the property management sector, identifying and alerting property owners of water damaging events in their initial stages. Analysts estimate that approximately two percent of U.S. properties experience leak-related damage each year, resulting in a corresponding increase in insurance claims. 2017 water damage insurance claims payments were $13 billion. The rise in such claims has facilitated the growth of leak detection systems by the more than 400 Water Utilities that serve approximately 140 million domestic customers. Aquana’s business strategy seeks to capture 5% of the remote shut-off valve market which represents a $1.4B opportunity. In addition, Aquana’s submetering, compliance, and automation features play a valuable role in helping users conserve water, ensure compliance with municipal regulations, and justify premium rents.”

Additionally, Aquana’s Internet connected remote value platform improves a utility’s ability to save time, money, and expense. Industry analysts estimate that approximately five to ten percent of water utility users don’t pay their bills, and that each time a utility is forced to disconnect and then reconnect service, significant labor and operational costs are incurred. Aquana’s sensors and actuators enable utilities to disconnect and reconnect services remotely from a secure central location.

The Aquana business division will reside in Geospace’s Adjacent Markets segment. This segment generated a 10% increase in year-over-year revenue for the six-month period ending March 31, 2021, despite the debilitating effects of the worldwide COVID-19 pandemic. Management believes that its technology focused diversification strategy will continue to pay strong dividends.

Wheeler concluded, “I’d like to welcome the highly innovative and talented Aquana personnel to our Geospace team. Through the combination of our technologies, engineering, and core manufacturing competencies, we look forward to forging a profitable and successful enterprise as we continue to drive results for our valued clients and trusted shareholders.”

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