JSTI plans to acquire the world's largest environmental testing company

Chinese listed company JSTI Group Co.
, Ltd.
(hereinafter referred to as "JSTI") recently issued an announcement stating that the company has established a wholly-owned subsidiary in the United States and intends to acquire the world’s largest environmental testing company through the merger of the US subsidiary.
TestAmerica ENVIRONMENTAL SERVICES LLC (hereinafter referred to as "TestAmerica") 100% equity
.
This transaction will be conducted in cash
.
As of the announcement date, the "Merger Agreement and Plan" between JSTI and its US subsidiary and the target company and its shareholder representatives has been signed
.
At present, the due diligence, audit, and evaluation work involved in this transaction is still in progress
.
JSTI CEO Wang Junhua said before that JSTI is very happy to work with the TestAmerica team, not only to expand TestAmerica's leading testing business in the United States, but also to deliver its services to other international markets with fast-growing needs
.
"We also look forward to bringing its environmental testing business to China to meet the environmental and health challenges China is facing,
" he said
.
According to the introduction on the TestAmerica website, the two parties signed the "Merger Agreement and Plan" on June 1 this year.
However, the agreement is expected to be implemented within 90 days due to certain conditions including "regulatory approval
.
" In this regard, Gao Shengda, secretary-general of the China Environmental Rehabilitation Industry Alliance, analyzed the 21st Century Business Herald that this is a large international merger in the environmental protection industry
.
Helping TestAmerica out of the US market For many people in non-environmental industries, TestAmerica is not a well-known company
.
According to the TestAmerica website, TestAmerica is a leading environmental testing company in the United States.
Its business scope includes the detection of various substances-pollution sources, air, drinking water, groundwater, shale gas, industrial sanitation, sediment, paper towels, PFAS, explosives, radioactive chemicals, mixed waste and other professional testing, analysis and compliance detection
.
TestAmeric's subsidiaries include EMLab P&K (leading microscope analysis and indoor air testing company) and METCO Environmental (focusing on the detection of atmospheric emissions) and so on
.
At present, it has more than 80 locations (laboratories + service centers) across the United States, more than 2,000 employees, and its 2015 revenue was 1.
5 billion yuan
.
A person in charge of an environmental testing company introduced to the 21st Century Business Herald that although TestAmerica is the largest environmental testing company in the United States and the world, TestAmerica has not made it out of the U.
S.
market.
Therefore, if the merger can be successful, its exit from the U.
S.
market will It helps, but it is not easy to open up overseas markets
.
"TestAmerica's revenue in 2015 was 1.
5 billion yuan.
If calculated at a profit margin of 15%, considering the background that the price-earnings ratio of American companies is much lower than that of domestic companies, and the estimated price-earnings ratio is 4 times, then the acquisition price is expected to be about 8.
About 100 million yuan
.
" Gao Shengda analyzed the 21st Century Business Herald
.
Capital joint deployment of environmental protection industry learned from JSTI that JSTI is making a comprehensive layout in the environmental protection industry, and the environmental protection industry is expected to become a new growth pole in the future
.
JSTI was established in 1978 and was listed on the ChiNext in 2012.
Its current market value exceeds RMB 10 billion
.
2015 is a very important year in JSJ's environmental industry map.
It has completed three environmental protection investments
.
At the beginning of 2015, JSTI completed the industrial and commercial procedures for increasing the capital of Innovia (Beijing) Environmental Technology Co.
, Ltd.
(hereinafter referred to as "Innovation") and officially obtained the controlling rights of Innovia
.
Innovat's core business is the research and development of advanced industrial wastewater treatment processes, with particular focus on the advanced treatment of various industrial wastewaters in petrochemicals, coal chemicals, steel coking and cold rolling, and chemical parks
.
In mid-2015, JSTI took a stake in Fuling Technology (Shanghai) Co.
, Ltd.
Fuling Technology is positioned as an environmental protection big data service provider.
The current main business direction is to build a "big data operation platform for industrial water treatment", which is aimed at industrial The company's process water and circulating water provide data collection and analysis services to help them improve the traditional backward operation and maintenance methods and achieve precise operation and maintenance
.
At the end of 2015, JSTI took a stake in Jiangsu Liwei Testing, which is one of the third-party testing agencies with the widest testing scope in East China.
Its testing items cover environmental testing, soil (hazardous waste identification) testing, dioxin testing, Food and agricultural products testing and workplace environmental monitoring and evaluation, etc.
, and was selected as the first batch of 8 social environmental testing institutions (comprehensive testing institutions) by the Environmental Protection Department of Jiangsu Province in 2014
.
"From the perspective of the 2015 financial report, the environmental consulting business segment accounted for only 1.
38% of the overall revenue, accounting for a relatively small proportion
.
" The relevant person in charge of JSTI analyzed the 21st Century Business Herald, "From our benchmark international According to the engineering design consulting company AECOM, environmental protection accounts for 1/3 of its revenue, which is also the direction of our efforts
.
" According to JSTI’s 2015 financial report, in the environmental protection sector, JSTI will further develop environmental monitoring and remediation.
Capacity, increase investment in research and development in environmental monitoring, water and air pollution control, and ecological restoration of contaminated sites, and actively explore the PPP model of municipal wastewater business development
.
The company will accelerate the exploration of the development of smart cities, intelligent transportation, and underground space development business; accelerate the pace of industrialization of new materials business; carry out collaborative design research such as BIM and 3D
.