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H2O Innovation acquires GMP to boost its membrane chemicals capabilities

  • H2O Innovation acquires GMP to boost its membrane chemicals capabilities
  • Immediate acquisition of the remaining 76% of GMP.

About the entity

H2O Innovation
H2O Innovation is a leader in customized water and wastewater treatment solutions using membrane technologies. We design and fabricate state-of-the-art, integrated water treatment systems for municipal, industrial and commercial users.


H2O Innovation has acquired the remaining 76% of the issued and outstanding shares of Genesys Membrane Products (GMP), located in Madrid, Spain, from arm's length sellers. The Corporation had taken a 24% ownership stake in GMP through the acquisition of Genesys in the UK on November 15, 2019. 

The valuation of GMP is based on six times earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The purchase price will be paid in cash over the next 3 years and will be based on two times the EBITDA of GMP for each calendar year of 2020, 2021 and 2022, multiplied by 76%. At closing, the Corporation paid out from its working capital an initial amount of €1.54 M ($2.40 M), which is subject to certain adjustments upon receipt of the 2020 audited financial statements. The earn-out due for 2021 and 2022 will be calculated and paid, using the same formula once the audited financial statements for each of those years will be completed. 

For the year ending on December 31, 2020, based on unaudited figures currently available, GMP’s revenues stood at approximately €5.00 M ($7.75 M). Twenty-four percent (24%) of GMP’s EBITDA have already been accounted for in the Corporation’s financial statements as a share of profit in an associate, using the equity method. As of the closing date, 100% of GMP’s results will be consolidated in the Corporation on a going-forward basis, which will increase the Corporation’s EBITDA on proforma basis by more than 10%.

GMP began as the technical service partner of Genesys, and over the years it has developed specialized membrane autopsy capabilities in its Madrid, Spain, laboratory. Its business also grew through the sale of specialty chemicals, filters, and complementary products to serve the membrane industry. This unique expertise is expected to facilitate the technical sales and key account strategy of the Corporation’s global chemicals business lines, Genesys® and PWTTM.

The acquisition of GMP should be seen as the next logical step in our goal of developing the world’s largest membrane specialty chemicals

“The acquisition of GMP should be seen as the next logical step in our goal of developing the world’s largest membrane specialty chemicals and associated services supplier sold through a large distribution network. GMP’s laboratory is globally recognized as the preeminent membrane autopsy facility in the industry and will support our Genesys and PWT teams in their sales efforts going forward. This laboratory has the experience and expertise of thousands of membrane autopsies performed over the years”, said Frédéric Dugré, President and Chief Executive Officer of H2O Innovation.

GMP’s local presence in Santiago, Chile, through its wholly owned subsidiary Genesys Membrane Products Latinoamerica Limitada, also positions the Corporation to better access the Latin American membrane chemical market, in particular the mining industry which is a strategic target for the Corporation’s Genmine™ product line. H2O Innovation looks to build on the success of GMP, which recently won a twoyear contract for membrane cleaning chemicals and site services of approximately US$2.40 M ($3.00 M) for a large mining customer in Chile.

“We are extremely delighted to become part of the H2O Innovation family,” said Juan Shang and Javier Pool, majority owners and co-CEOs of GMP. “Having had the pleasure of working with the H2O Innovation team for over a year now, we feel our company cultures are well aligned, and we are convinced that being under the same roof will accelerate our growth. Our employees in Spain and Chile are all excited to be fully a part of this talented global team.”

The addition of GMP is expected to generate more cross-business synergies, a clear focus of H2O Innovation’s 3-Year Strategic Plan. Local support of PWT’s distributors in Latin America and collaboration with Piedmont, the Corporation’s business line, which is also located in Spain, are two areas where there are opportunities for their businesses to work efficiently together.

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