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Chinese TICA Thermal Solutions group to acquire Italian ORC supplier Exergy

Sarayköy geothermal power plant of GreenEco, Turkey (source: Exergy)
Alexander Richter 26 Sep 2019

As part of an auction conducted yesterday, Chinese TICA Thermal Solutions Co. Ltd gave the winning bid for the acquisition of Italian ORC supplier Exergy S.p.a.

As reported this morning from Italy, Exergy S,p.A, a Maccaferri group company, was sold yesterday afternoon. We previously reported on the financial difficulties of Exergy’s mother company and the corresponding sale of its energy business. As part of the disposal of Exergy, the auction was held with a targeted auction price of EUR 16 million (ca. USD 17.6m).

The sale was to be divided into two lots. If no valid bid was received for the first lot, bidding for the second one was to be opened. The first lot includes the entire business complex and the acquisition of the subsidiary Exergy Turkey. The starting price of the auction, equal to EUR 16 million (ca. USD 17.6m) was reached and therefore there is no need to a considered reduction in a second lot. Therefore the sale went through and no reduction was necessary in the second lot “in consideration of the ascertained continuation by the contractor of the ‘orders in progress’ and of the after sales contracts, as well as the release of Exergy and Exergy Turkey from their residual obligations towards customers and the release of the related guarantees”.

Under the terms of the sale, the buyer will have to keep all the employees at the Olgiate Olona plant for at least 12 months after the acquisition. Of initially 69 workers, the number was decreased to 50 in the last few months.

The buyer is TICA Thermal Solution Co. Ltd. from Nanjing, China. Focused primarily on central air conditioning and refrigeration equipment production, integrating R&D, manufacturing, sales and services, the company engaged with U.S.-based United Technologies Corp. (UTC) on a global strategic cooperation related to the PureCycle ORC technology, a small-scale power generation technology for low-temperature waste-heat and geothermal power generation.

The company was assisted by CMS law firm. In a statement to the media, Jiang Li, TICA’s CEO points to the creation of synergies, stating that “The first synergy is that of the products, together we have a full offer of products to customers. The second is that of the market: ours is predominantly in Asia, while that of Exergy is above all in Europe. We can share our resources to make our business more effective “.

The company bid EUR 16.05 million (ca. USD 17.62m) for Lot 1 so no second bidding for the second lot was required. Before the sale is final, the buyer will have to pay the full amount. The offer by TICA exceeded the set auction price by EUR 50k. According to the news, the offer by TICA was the only one opened in the court yesterday.

We will reach out to the companies involved to get a better picture of the plans going forward. It is though positive for the geothermal sector that Exergy and its work will continue.