In a deal designed to address the world’s most critical water challenges, global water technology company Xylem Inc. is to acquire clean technology firm Evoqua Water Technologies in an all-stock transaction valued at approximately $7.5bn.
Under the terms of the definitive agreement, Evoqua shareholders will receive 0.480 shares of Xylem for each Evoqua share, representing a value of $52.89 per share or a 29 percent premium based on Xylem and Evoqua closing prices as of 20 January 2023.
Building on Xylem’s global leadership in water solutions and Evoqua’s leadership in advanced treatment solutions and services, the combined company will be uniquely positioned to develop and deliver an even more comprehensive offering of innovative solutions.
Moreover, the combination unlocks compelling new growth opportunities and is expected to deliver run-rate cost synergies of $140m within three years, driven by scale efficiencies in procurement, network optimisation and corporate costs.
“Solving the world’s water challenges has never been more urgent,” said Patrick Decker, president and chief executive of Xylem. “Our acquisition of Evoqua creates a transformative global platform to address water scarcity, affordability and resilience at even greater scale. The combined company delivers an unparalleled portfolio of advanced technologies, integrated services and application expertise across the water cycle.”
Following closing, the combined company will continue to be led by Mr Decker, with two current members of the board of directors of Evoqua expected to join Xylem’s board of directors.
"I am incredibly proud of what our team at Evoqua has achieved to date, providing mission-critical water treatment solutions to the market and for our customers,” said Ron Keating, president and chief executive of Evoqua. “Along the way, we have earned a reputation for quality, safety and reliability around the world. Together with Xylem, we will drive innovation on a larger scale for our customers, positioning us to create even more value for our stakeholders.”
The transaction, which is anticipated to close in mid-2023, is subject to approval by shareholders of Xylem and Evoqua, the receipt of required regulatory approvals and other customary closing conditions.
Mr Decker concluded: “Together, our complementary businesses will be even more strongly positioned to help our customers and communities tackle their most challenging water needs.”
News: Xylem to buy Evoqua in $7.5 bln deal to tap water demand