With the purchase of a new aerospace product line from Delton, Michigan-based Keltech, Inc. earlier this month, Burnaby-based IWG Technologies, Inc. (TSX-V:IWG) has jump-started an acquisition-focused growth strategy.
The just-formed IWG Technologies is a holding company for Burnaby-based International Water-Guard Industries Inc., which produces water treatment products for aircraft and has operated locally since 1982.
David Fox, president and CEO of both companies, said IWG was formed earlier this year as an umbrella company to hold and finance International Water-Guard and any new business units IWG acquires.
“We’re looking throughout the aviation world at products and technologies that are complementary to the things that we’re doing.”
As part of the Keltech deal, which was announced July 6, IWG bought the Michigan company’s aviation water heater product line for US$700,000. International Water-Guard will absorb the new product line and look to have it fully qualified by aviation safety agencies for use on board aircraft.
It’s a rigorous qualification process that International Water-Guard knows well and has achieved for its water treatment technology – but something Fox said would have taken Keltech away from its strategic focus.
He added that the new Keltech product line complements International Water-Guard’s current offerings and appeals to the same customer base.
As IWG looks for further acquisitions, Fox said it plans to focus on the market subsection it knows best: products and systems that are used in aircraft interiors.
“It could be that there is a company with a product very much like Keltech in the fact that it is applicable to the aviation world, but the company doesn’t have the track record or skillset to get it qualified or get it into the supply chain,” he said. “In other cases, there may be technologies that are directly compatible with our own and would expand our offerings.”
Fox said his company plans to continue what International Water-Guard began in 2005: its divestiture of the industrial and commercial side of what was then a broader water treatment technology company and focus solely on aerospace.
Fox said the strategy has allowed International Water-Guard to capitalize on its first flight-qualified water treatment unit.
“It’s very, very difficult to get anything approved to go on board an airplane,” he said. “That was really, when you got right down to it, the secret sauce that this business had.”