WASHINGTON, DC — Xylem Inc. (NYSE: XYL), a number one world water expertise firm (“Xylem”), and Evoqua (NYSE: AQUA), a frontrunner in mission-critical water therapy options and companies, as we speak introduced they’ve entered right into a definitive settlement underneath which Xylem will purchase Evoqua in an all-stock transaction that displays an implied enterprise worth of roughly $7.5 billion.
As water dangers rise in world significance, this transaction unites two firms with a shared deal with fixing the world’s water challenges by addressing prospects’ and communities’ most crucial wants. Constructing on Xylem’s world management in water options and Evoqua’s management in superior therapy options and companies, the mixed firm might be uniquely positioned to develop and ship an much more complete providing of revolutionary options.
Evoqua, a frontrunner in North America water therapy, enhances Xylem’s distinctive portfolio of options with superior water and wastewater therapy capabilities, a robust and intensive community of service professionals and entry to various enticing industrial markets with resilient, recurring income streams. Evoqua’s options, together with digitally enabled choices, optimize and outsource mission-critical water therapy programs for patrons in high-growth sectors corresponding to life sciences, microelectronics, energy and meals and beverage. As well as, Evoqua is a frontrunner within the remediation of rising contaminants, together with PFAS.
Xylem and Evoqua generated over $7 billion in mixed income within the 12-month interval ending September 30, 2022, with $1.2 billion in adjusted EBITDA. The mix unlocks compelling new progress alternatives and is predicted to ship run-rate value synergies of $140 million inside three years, pushed by scale efficiencies in procurement, community optimization and company prices. As well as, the transaction permits Xylem to take care of its robust stability sheet, which gives the mixed firm with vital strategic flexibility and optionality.
Complementary Companies
“Fixing the world’s water challenges has by no means been extra pressing. Our acquisition of Evoqua creates a transformative world platform to deal with water shortage, affordability and resilience at even larger scale,” mentioned Patrick Decker, President and CEO of Xylem. “The mixed firm delivers an unparalleled portfolio of superior applied sciences, built-in companies and utility experience throughout the water cycle.”
“Collectively, our complementary companies might be much more strongly positioned to assist our prospects and communities deal with their most difficult water wants,” continued Decker. “We’re enthusiastic about constructing the world’s strongest platform for fixing water alongside our Evoqua colleagues.”
“Becoming a member of forces with Xylem is an thrilling alternative for Evoqua and for our group members. This mix gives a platform to leverage our mixed strengths and improve our impression to higher deal with essentially the most urgent and more and more complicated world water challenges,” mentioned Ron Keating, Evoqua’s President and CEO. “I’m extremely pleased with what our group at Evoqua has achieved to this point, offering mission-critical water therapy options to the market and for our prospects. Alongside the best way, we’ve earned a popularity for high quality, security and reliability around the globe. Along with Xylem, we are going to drive innovation on a bigger scale for our prospects, positioning us to create much more worth for our stakeholders.”
Transaction Particulars
Evoqua shareholders will obtain 0.480 shares of Xylem for every Evoqua share, representing a worth of $52.89 per share or a 29 % premium primarily based on Xylem and Evoqua closing costs as of January 20, 2023.
The transaction, which is anticipated to shut in mid-2023, is topic to approval by shareholders of Xylem and Evoqua, the receipt of required regulatory approvals and different customary closing situations.
Upon closing, Xylem shareholders will personal roughly 75 % and Evoqua shareholders will personal roughly 25 % of the mixed firm on a completely diluted foundation.
Following the closing, the mixed firm will proceed to be led by Patrick Decker, Xylem’s President and CEO. Two present members of the board of administrators of Evoqua are anticipated to hitch Xylem’s board of administrators.