Aqua America continues on acquisition trail
Aqua America Inc. acquired eight water and wastewater systems in the fourth quarter of 2005, making a company record of 30 acquisitions in one year.
“The momentum carried through the fourth quarter helped us achieve an annual all-time record number of acquisitions,” said Aqua America Chairman and Chief Executive Officer Nicholas DeBenedictis. “We broadened our capabilities in the wastewater arena and added more ‘tuck-in’ water systems, which we can smoothly integrate into our operations network to capitalize on economies of scale. We plan to stay the course with our successful growth-through-acquisition strategy in 2006, keeping a steady pace with a goal of 25-to-30 new acquisitions.”
In the final days of 2005, Aqua Pennsylvania, Inc. purchased the water system assets of the privately owned Oakland Beach Water Company, which serves approximately 2,000 residents in Sadsbury and Summit townships, Crawford County, marking the company’s first entry into Crawford County. The US $750,000 transaction was completed with a combination of cash and Aqua stock. The system will be managed as part of Aqua Pennsylvania’s Shenango Division, based in Sharon, which is approximately 30 miles from the newly acquired system.
Aqua America, Inc. is the largest US-based publicly traded water company, serving more than 2.5 million residents in Pennsylvania, Ohio, North Carolina, Illinois, Texas, Florida, New Jersey, Indiana, Virginia, Maine, Missouri, New York and South Carolina.
Grundfos expands in US, Eastern European pump markets
The Danish pump manufacturer Grundfos is acquiring the US company Paco Pumps from its owner, the Swiss Sulzer, which will increase Grundfos’ turnover in the US market by 30 percent.
Group President and Chief Executive Officer Jens Jørgen Madsen commented that this takeover enables the Danish company to take “an important step towards an increased focus on the American market that involves establishing production facilities in Mexico, a massive expansion of our US sales force,” improve its skills, and help set up a local research and development function. Together, these elements will help Grundfos be less affected by fluctuations in the dollar exchange rate, he explained.
Grundfos will increase its turnover on the North American market beyond the US$ 250-million mark with this acquisition. Paco reports an annual turnover of US$ 45 million. Paco’s head office and production facilities are located near Houston, Texas, and it owns a production unit close to Shanghai, China, which produces pumps for the Chinese and US markets.
In addition, the Grundfos Group opened up a sales company on 1 January 2006 in Romania, marking the company’s continuing strategic investment in Eastern Europe, a region that has been experiencing significant increase in market demand for water supply and wastewater equipment and services.
Currently, the group has 1,500 employees in Eastern Europe in sales companies located in Poland, Russia, Czech Republic, Hungary and the Ukraine. The new Romanian company is expected to reach a 2006 turnover of DKK 80 million, and to double this amount in four to five years.
GIS contract awarded to Advantica
The City of Tempe, Arizona, USA, awarded a contract to Advantica for the design and implementation of an integrated geospatial information system (GIS) to enhance the planning, maintenance and operation of the Water Utility Department’s water, sewer, stormwater and flood irrigation assets.
The multi-phase project will replace the Tempe Water Department’s spatial asset management platform that will integrate with network modeling, work management, document management, customer billing, and other departmental and enterprise systems.
Advantica previously worked with the City of Tempe to study the importance of using integrated GIS to increase efficiency within the Water Utilities Department and among all City departments to identify the needs and requirements to develop a citywide enterprise GIS system. The GIS contract will establish systems and business processes within the water utilities department for maintaining GIS water asset data that may be shared citywide.
“Today’s utilities are being asked to do more with less - increase efficiency and production while maintaining premium customer service,” said Melissa Rohland, director of operations, planning and commercial systems at Advantica. “By implementing an integrated GIS in conjunction with other departments, the city will have the most accurate, up-to-date data on which to base decisions in serving their customers.” The municipality’s water operation division is responsible for the maintenance and rehabilitation of more than 800 miles of water lines. Advantica is based in Carlisle, Pennsylvania, USA.
Field Notes
Brazil:The association of state sanitation companies (AESBE) announced that the Brazilian federal government’s multi-year plan of 2003 will most likely not provide 100% basic sanitation coverage by 2024, as claimed by the government. AESBE calculated that federal expenditures on sanitation projects amounted to 1.45 billion euros in 2005, while they claim a yearly investment of four billion euros is necessary to cover the cost of the government’s long-term sanitation plan.
Canada:Hatch Mott MacDonald acquired the water and wastewater engineering firm AWS Engineers & Planners Corporation from American Water Canada, Corp., to expand its operations into Canada. AWS maintains offices in Burlington and the Niagara Peninsula in Ontario. Through this acquisition, Hatch Mott MacDonald, with a staff of 1000 in North America including 150 in Mississauga, Ontario, will add 40 more people with expertise in water and wastewater engineering. Nicholas DeNichili, president of Hatch Mott MacDonald’s Infrastructure Unit, said that the acquisition would strengthen the company’s “skills and capabilities in instrumentation and control system engineering, an AWS specialty.”
USA:American Water will participate in the US Environmental Protection Agency’s (EPA) Climate Leaders program. Launched in 2002, Climate Leaders is an industry-government partnership that works to develop long-term, comprehensive corporate climate change strategies. The company pledged to reduce and inventory its corporate-wide greenhouse gas (GHG) emissions.
Each EPA Climate Leaders partner commits to: setting corporate-wide greenhouse gas emissions reduction goals, to be achieved in 5-10 years; developing a corporate-wide inventory of the six major greenhouse gases; developing a corporate greenhouse gas inventory management plan; and reporting inventory data annually and documenting progress toward their reduction goal.
Since 1999, 65 of American Water’s surface water treatment plants have received the prestigious EPA Director’s Award from the Partnership for Safe Water for voluntarily achieving more stringent performance goals than those required by state or federal drinking water standards. American Water, the largest private water company in the USA, is based in Voorhees, New Jersey.
USA:The McIlvaine Company reports that US is losing leadership in traditional “smokestack” industries, such as cement, steel, pulp and paper, but it still leads in pharmaceuticals, HVAC, and information technology. However the US maintains a healthy lead in wastewater treatment expenditures. In China, these expenditures are growing at double-digit rates, but will continue to remain at only 80% of the US market despite its greater population up to 2009.
The McIlvaine’s online “Valves: World Markets” reports that the global market for industrial values will grow steadily to US$ 49 billion in 2009 up from $43 billion in 2005. In 2009 automatic regulation and control valve sales are projected at $11.8 billion followed by ball valves at just over $11 billion. Gate and globe valve sales will exceed $8 billion. Butterfly valve sales will be $5 billion, while plug valve sales will pass the $4 billion mark.
