Energy Recovery prices IPO near top of range

San Leandro, Calif.-based Energy Recovery (Nasdaq: ERII) started trading on the Nasdaq today after pricing its initial public offering of 14 million shares at $8.50 per share.

That's near the top of an expected $7 to $9 price range for the company, which makes energy recovery devices for the water desalination industry.

The company said it plans to use its net proceeds from the offering for working capital and other general corporate purposes, including to finance its growth, develop new products and fund capital expenditures.

Energy Recovery said 8.1 million shares were sold by the company, with 5.9 million sold by selling stockholders.

Founded in 1992, the company is backed by two Norwegian investment groups — Arvarius, which holds 28.9 percent of Energy Recovery, and Caprice, which holds 11.3 percent.

Citigroup and Credit Suisse, the lead underwriters on the IPO, have an option to purchase an additional 2.1 million Energy Recovery shares.

Energy Recovery said it primarily operates in the sea water reverse osmosis, or SWRO, sector.

Its PX Pressure Exchanger helps optimize the energy intensive SWRO process by recapturing and recycling up to 98 percent of the energy in the high pressure reject stream, according to the company.

In its filing with the U.S. Securities and Exchange Commission, Energy Recovery said its pressure exchanger reduces SWRO energy consumption by an estimated 60 percent as compared to the same process without any energy recovery devices.

Energy Recovery said its PX device has been installed in over 300 desalination plants.