Five years ago U.S. Filter was just one of the many small equipment companies that served the U.S. water market. Today, it is considered by some to be the 600-pound gorilla of the industry.
Already considered the worlds largest global water treatment company, U.S. Filter made news recently when it announced plans to acquire Culligan Water Technologies for approximately $1.5 billion in U.S. Filter common stock.
Culligan was founded in 1936 and has water treatment systems installed in more than 3 million households in the United States. Combined, the two companies will have more than $4.5 billion in revenues, 2,000 locations and more than 20,000 employees in 90 countries throughout the world. The transaction, which is subject to approval by both companies shareholders, antitrust regulations and other governmental and customary conditions, is expected to close in late May.
Since 1990, U.S. Filter has purchased more than 120 companies in all aspects of the water treatment market. Seventy of those acquisitions have come in the past 15 months and have included some of the larger players in the market, like Wheel-abrator, Davis Water & Waste and WaterPro.
In the last two months alone USF has acquired the Water Treat-ment line of FMC Corp. and added the Memcor CMF hollow-fiber membrane line to its stable. The company also recently purchased rights to water on sections of land in California and Texas.
U.S. Filter Chairman and CEO Richard Heckmann and his various spokespeople have made it clear they want their company to become the "one stop" source for water treatment equipment. With the Culligan acquisition, the company can provide equipment to treat your water three times: first at the municipal level, then when it enters your home and finally as municipal wastewater.
Conservative estimates put the global water market at $350 billion to $600 billion a year, which means U.S. Filter now controls about one tenth of the market. While not exactly a controlling interest, that is a large percentage for one of the most critical industries on the planet.
Being able to go to one company to meet all your treatment needs is an attractive idea, since it would streamline purchasing and should lower costs. My only fear is the smaller, more personal water equipment companies might fade away, similar to what happened to the corner drugstore after Wal-Mart came to town.
The Water & Wastewater Equipment Manufacturers met last fall to discuss their industry. One session was devoted to the Power of Change: Learning to Dance with a Gorilla. The gorillas identity wasnt mentioned, but I think most of those in attendance already know the biggest one in town.
