CoreNetwork, a local group of angel investors, benefited from its original investment and subsequent sale of its interest in Pump Engineering LLC, a Southeast Michigan company.

“It turned out to be a fantastic investment for our group since we doubled our money in 12 months,” said Bob Savage Jr., founder and managing partner of CoreNetwork in Toledo.

CoreNetwork completed the sale of its interest in Pump Engineering to Energy Recovery Inc. (ERI) of California in December after its original investment in early 2009, according to Savage.

Pump Engineering is a leading global provider of centrifugal turbine technology for desalination (removal of salt from water) applications and demonstrated support for emerging markets such as natural gas and high-pressure fluid processing, Savage said.

Founded in Monroe, the company relocated to new facilities in New Boston, near Detroit Metropolitan Airport for logistics reasons.

The firm’s hydraulic turbochargers and pumps are custom designed to reduce energy consumption and increase efficiency in specific process conditions, making them applicable to worldwide markets.

ERI, a leader in the development of energy recovery devices for the desalination industry, announced the completion of its acquisition of Pump Engineering in late December. Pump Engineering will operate as a wholly owned subsidiary of ERI.

The acquisition is aligned with ERI’s growth strategy of expanding its products and addressing potential new markets, according to the company’s president and CEO G. G. Pique.

CoreNetwork got involved with Pump Engineering through its accounting firm, Gilmore Jaison & Mahler in Maumee. Savage said his firm introduced them to Plymouth Venture Partners, another angel investment firm in Ann Arbor.

The two companies invested a total of $2.4 million in Pump Engineering in late 2008, Savage said.

ERI paid the shareholders of Pump Engineering approximately $20 million in cash and 1 million shares of ERI common stock (NASDAQ: ERII).

“It’s a tremendous transaction for our local investors and the region as ERI will bring its global expertise to support Pump’s growing business and employment base,” Savage said.

CoreNetwork frequently partners with Plymouth Venture Partners led by CEO Mark Horne, according to Savage. That firm’s portfolio includes investments in 20 companies primarily in Michigan, Ohio and Pennsylvania.

“We view the acquisition of Pump Engineering by ERI as an example of the types of transactions that will help re-energize the economy in Michigan,” Horne said.

CoreNetwork has invested in a number of local startup companies, including AquaBlok, Limited, American Broadband Telecommunications and Nextronex Energy Systems, according to Savage.

American Broadband was a

$1 million company when CoreNetwork invested in it and today it’s a $10 million company operating from Fort Industry Square in Downtown Toledo, Savage said.

AquaBlok was established with an investment by CoreNetwork in 2008, according to its president and CEO John Hull.

The company continues to develop its patented coating technology for clay-based algae treatment products with Hull’s engineering consulting firm, also located in Toledo.

Nextronex was established with $1 million in local investments from CoreNetwork, Rocket Ventures of the Regional Growth Partnership and UT Innovative Enterprise. Nextronex is preparing to produce a solar inverter that would reduce the cost of generating electricity from solar power at its new plant in Millbury.

“We continue to search for profitable investment opportunities which should help stimulate the economy in Toledo and this region, as well as provide excellent returns for investors,” Savage said. “We’re now looking to invest in a couple of local companies.”

CoreNetwork was founded in 2003 by Savage and other business leaders in Toledo as a private independent angel investment group in Northwest Ohio.

It is the second oldest angel network in the state of Ohio and a member of the Angel Capital Association.

Tags: Bob Savage Jr., CoreNetwork

This entry was posted on Friday, February 12th, 2010 at 12:00 am and is filed under Entrepreneurs, Toledo Business Link.
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