Ann Arbor-based venture capital firm Plymouth Venture Partners reaped a return of at least 2 times its investment in New Boston-based Pump Engineering, an executive said this afternoon.

PVC in January invested $2.4 million in Pump Engineering, which was sold last week to San Leandro, Calif.-based Energy Recovery Inc. for $20 million and 1 million shares of ERI's common stock (Nasdaq: ERII).

Mark Horne, CEO of Plymouth Management Company, which manages Plymouth Venture Partners, said the deal marked a "very strong" return of more than double its original investment. He wouldn't provide a specific figure.

The deal reflects a rare instance in which a venture capital company enjoys an "exit" - the sale or public offering of one of its investments - less than 12 months after its original investment.

"We felt great about the investment from the day we came in," Horne told AnnArbor.com.

Plymouth Venture's investment in Pump Engineering was also unusual because Pump Engineering is a 23-year-old company. Venture capital is typically directed toward startup companies.

But Pump Engineering, which also had traditional financing from National City Bank, had recently developed energy-efficient turbo-charged desalination technology that can also be applied to other high-pressure fluid processes.

The company expects to report $8 million to $9 million in revenue in 2009, but projects that figure will rise to $13 million to $15 million in 2010.

After Plymouth Venture's investment, Horne was appointed vice chairman. He led acquisition talks with ERI.

"The company, while it was 20 years old, really hadn’t hit its catalyst for growth until the last few years," Horne said. "Its growth stage came late in life, so it was actually sort of perfect for us in terms of timing to come in when we did."

Desalination is an immensely expensive process in which salt is removed from ocean water, typically to provide drinking water for communities underserved by natural sources of fresh water.

"This acquisition underscores ERI's commitment to lead a global effort to prove that desalination is an affordable, environmentally sound and energy-efficient answer to the growing water crisis," ERI President and CEO G.G. Pique said in a news release. "Pump Engineering is the leading, high-quality energy recovery device solution in areas where the cost of power is low and the customer is more sensitive to the up-front capital cost.

The deal comes at an opportune time for PVC, which is close to wrapping fundraising on a new $40 million investment fund. Horne said he hopes to be finished with the first half of fundraising by the first quarter of 2010.

The Pump Engineering deal "has gotten us a lot of traction in terms of fundraising interest in the new fund," Horne said.

Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter.