Shares of Pure Technologies Ltd. (TSX:PUR) almost doubled after it was announced that Xylem Inc. (NYSE:XYL) would acquire the company for $509 million. Pure Technologies is a Calgary-based tech company involved in the application of innovative technologies in the infrastructure and energy business. The acquisition at such a high premium illustrates a great deal of confidence on the part of Xylem in Pure Technologies.
In the third quarter Pure Technologies saw its revenue rise 9% to $30.9 million and posted a net loss of $0.1 million while year to date net earnings rose to $1.5 million. The purchase price of Xylem reflected a 102.7% premium on the stock price of Pure Technologies, which was fantastic news for shareholders.
Xylem Inc. is an industrial technology company using water to service utilities, residential and commercial buildings, and others. Shares of Xylem have climbed 36.5% in 2017. The company released its third quarter results on October 31. Revenue was up 33% year over year to $1.2 billion and the company reported adjusted net income of $119 million or $0.65 per share representing a 20% increase from the prior year.
Global orders experienced organic growth of 6% and Xylem raised its full-year forecast for adjusted earnings per share by five cents. For the full-year Xylem is projecting $4.7 billion in revenue, up 25% from 2016. The stock also offers a dividend of $0.18 per share representing a 1% dividend yield.
