“The acquisition of Cicasa is in line with the international expansion strategy of the Arad Group,” said Gabi Yankovitz, CEO of the Arad Group. “The deal will increase Arad’s revenues and the group will gain a strong foothold in the fast expanding Mexican market and the large Latin American market.”
By using Arad’s advanced water metering management and control systems, Mexican utilities will benefit from improved financial, operational and customer care performance, exact measurement, automated and remote water reading and real-time information availability.
Cicasa is a privately held company which located in Mexico City. The company specializes in the development, manufacturing and distribution of water measurement equipment. Founded in 1953, the Cicasa has its own foundry.
In 2013, Cicasa reported a net income of 1.1 million Mexican peso ($83,662) and revenues of 156.4 million pesos ($11.95 million).
Under the terms of the agreement, Arad will acquire 51 percent of Cicasa for $2.04 million. Arad holds an option to buy the remaining 49% of the company in May 2019, or April 2024.
Mexican utilities are making great efforts to improve the measurement of water consumption in an attempt to reduce the level of non-revenue water, which stands currently at above 30% in most large cities.
A recent report published by the OECD on proposed water reform in Mexico indicates that non-revenue water reached 40% in Mexico City, the largest metropolitan in Latin America with a population of more than 22 million inhabitants.