Eco Investor May 2017

Pre-Profit Securities

EnviroSuite Sells Consulting Business

EnviroSuite is selling its Pacific Environment Consulting practice to focus on its environmental monitoring and management services. The sale is a big move that dramatically changes EnviroSuite's business.

The buyer is Environmental Resources Management (ERM), said to be the world's leading environmental and sustainability consulting group. The price is $15 million, and the transaction should be completed in late May or early June.

ERM will acquire EnviroSuite's subsidiaries Pacific Environment Pty Ltd, Pacific Environment Holdings Pty Ltd and DLA Environmental Services Pty Ltd.

EnviroSuite will retain EnviroSuite Operations Pty Ltd, EnviroSuite Holdings Pty Ltd and EnviroSuite Corp (USA). Its new business focus will be the global expansion of its EnviroSuite based software services.

Post sale, ERM will partner with EnviroSuite to provide monitoring and reporting services to clients, with ERM reportedly already having identified some current projects in which it can utilize EnviroSuite's services.

The sale also changes EnviroSuite's balance sheet and revenue. The company said that based on its 2015-16 results, the transaction would have resulted in a decrease in total assets of $15.33 million to $6.65 million, a reduction in revenue of $16.13 million to $1.7 million and an EBITDA reduction of $2 million to produce an EBITDA loss of $3.3 million.

EnviroSuite's strategy is to become the world's leading provider of software as a service (SaaS) for monitoring and operations management to solve environmental problems. The cash from the sale will be invested in sales, marketing and developing more features for the EnviroSuite software.

The company recently established sales and marketing teams in the USA and Europe and will develop these.

"With a rapidly growing pipeline, new sales partners and recent sales in Spain, UK, USA and Mexico across a range of industry sectors and government, the Company is well placed to make this transition," said EnviroSuite's managing director, Robin Ormerod.

EnviroSuite also announced that it has commenced a project for the regional government of Asturias in Spain to analyze the air quality of the port of Gijo´n, the surrounding community and industry. The area has a high concentration of industrial facilities and shipping, and the project is part of the government's initiative to improve the air quality of the region.

Chaim Kolominskas, EnviroSuite's general manager - Europe, said the government already collects significant amounts of atmospheric data and it is looking for new ways to manage and analyze this information to better understand the sources of the contaminants and improve the air quality.

"At Gijo´n, we will be managing information for particulate matter, sulphur dioxide, nitrogen oxide, carbon monoxide, benzene and ozone," he said. "EnviroSuite's real-time analytical capabilities provide an opportunity to identify risks as they occur and respond rapidly to emerging air quality issues across the entire region."

The pilot project will be run over six months and can be extended. (ASX: EVS)






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