On Friday, water management technology company Xylem announced that it has acquired privately held Australian water and wastewater tech and services firm MultiTrode for approximately $26 million.
Explaining the purchase, Xylem President and Chief Executive Officer Gretchen McClain noted that "an essential part of Xylem's growth strategy is to acquire companies that complement our own technology and geographic presence." The MultiTrode purchase facilitates both these goals, first by expanding Xylem's presence in Australia and adding technology for "reducing energy consumption, call-outs, failures, and overflows."
Financially, MultiTrode recorded $13 million in sales in fiscal 2012, resulting in a price-to-sale valuation of about 2 on the purchase, significantly higher than the 1.3-times-sale valuation that Xylem's own shares carry. Unsurprisingly, then, Xylem's shares sat out Friday's stock market rally, closing down a small fraction of a percent at $27.49.
The article Xylem Buys Australia's MultiTrode for $26 Million originally appeared on Fool.com.Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.