June 2017 Vol. 72 No. 6
Newsline
Water Sector M&A Tops $57 Billion
Mergers and acquisitions (M&A) in the global water sector exceeded $20 billion in 2016, pushing the three-year total valuation of announced deals to more than $57 billion, according to Bluefield Research’s new report, Water Mergers & Acquisitions: Key Trends in a Changing Global Landscape.
The in-depth analysis of 447 transactions since 2014 highlights key shifts in the competitive landscape as companies position to address increasing municipal and industrial needs for water and wastewater infrastructure solutions.
“The types of deals and breadth of companies building out positions by acquisition are positive signals for water sector growth,” reported Reese Tisdale, president of Bluefield Research. “Broader market forces, including poor water quality in Flint, growing population demands, and increasing risks to industrial company bottom lines, whether they be in energy, power, brewing or mining, underpin deal flow among companies angling to be at the forefront of this change.”
Bluefield’s analysis uncovered several key trends that signal far-reaching impacts on the competitive landscape going forward:
U.S. remains epicenter of deal flow. Of the 447 deals analyzed, 265 targeted companies are headquartered in the U.S. The $1 trillion infrastructure investment proclamations by the Trump administration, public concerns about water quality, and municipalities’ need to do more with less financially has bolstered investment sentiment towards technologies focused on efficiency and private participation.
Advanced technology solutions usher new wave of growth opportunities. Whether reclaimed wastewater for municipal and industrial reuse in the U.S., micro-pollutant treatment in Europe, or mining sector demand for alternative water supplies in Chile, water treatment and management solutions are becoming more sophisticated and economically attractive. As a result, consolidation of advanced technology suppliers will gain momentum, globally, as strategic buyers look to expand their portfolios through acquisition.
Consolidating EPC sector impacting water. Over the past 36 months, leading engineering design firms have participated in more than $11.7 billion of deal flow to recast their footprints, and changed the competitive landscape among leading service providers.
Japanese, emerging Chinese players navigating globe. A growing roster of critical infrastructure investors has secured beachheads in global hotspots, including Brazil, the U.K., Australia and the Middle East. This activity could have longer-term impacts on competition for technology and utility ownership going forward.
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