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Xylem acquires Evoqua in $7.5B water deal

Illustration of a pitchfork lifting a jug of water.

Illustration: Gabriella Turrisi/Axios

Xylem, a D.C.-based water tech supplier, agreed to acquire the water treatment company Evoqua in a deal valued at $7.5 billion, including debt.

Why it matters: Water is difficult to monetize — but it's a space that's drawing investor interest as climate change worsens water scarcity.

Of note: Xylem generated about $5.3 billion in revenue in fiscal 2022; Evoqua about $1.7 billion.

  • Two Evoqua directors will join the Xylem board. The deal is expected to close midyear.

What they're saying: "Water scarcity, efficiency and availability — that goes across the entire spectrum of what we do," Xylem president and CEO Patrick Decker tells Axios.

Zoom in: As for synergies, the acquisition will significantly expand Xylem's access to industrial customers as well as the company's U.S. footprint.

  • Industry generated about 82% of Evoqua's end-market revenue, compared to about 35% for Xylem.
  • In terms of footprint, most of Evoqua's business is focused in the U.S., versus less than half for Xylem.
  • Procurement and streamlining duplicative corporate functions were areas of focus, too.

What we're watching: Whether this deal opens the faucet for more transaction activity in the water sector.

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