Reasons why

World Water Week Opens With Global Leaders Calling For Green Investments To Secure Water For Future Cities. August 22, 2011

Joint Singapore International Water Week and Black & Veatch Event identifies Water Pressures Industry must solve together. July 8, 2011

Pricing water to reflect its true value; encouraging innovation that reduces costs, improves efficiency and drives new revenue streams; and educating the public, particularly youth, on the importance of water are three of today's most challenging pressures for the world's water leaders, according to initial findings from the high-level "Water Pressures" workshop at Singapore International Water Week (SIWW) 2011.

Organised in partnership with Black & Veatch as part of the SIWW Water Leaders Summit, the workshop featured approximately 110 global leaders from more than 20 countries. Twelve internationally renowned chairpersons led delegates through a total of 25 rapid-fire conversations focused on three pressures that the water sector is facing today: Policy Pressures, Innovation Pressures and Public Pressures.

At the conclusion of the event, each chairperson summarized key findings from their groups' discussions. These findings included the following recommendations for addressing all three pressures:

• Oil the wheels of innovation by creating policies that promote investment in new technologies to reduce costs, improve efficiency and drive new revenue streams
• Collaborate with technology partners to determine the most cost-effective, creative solutions
• Allow for additional investment in water by utilizing technology to improve revenue collection and detection of non-revenue water
• Ensure the price of water reflects its true value
• Engage multiple stakeholders in designing transparent processes for mitigating policy pressures
• Create the political environment that facilitates the implementation of difficult but necessary water policies
• Don't underestimate community support for tough water policies
• Communicate how water is a critical resource by having strong leaders deliver messages in the right format with the appropriate level of language
• Remember that changing public perception is an important first step for technology adoption
• Educate the public, particularly youth, about the close links between water and health and the impact of water on energy and food

"We've listened to and captured nearly a dozen hours of invaluable information that was shared during the roundtable discussions today," said Dan McCarthy, President and CEO of Black & Veatch's global water business, who moderated the event. "This Singapore conversation helped identify solutions to these key challenges that the industry must solve in a collaborative way."

Titled "Water Pressures" – How to Adapt and Lead in a Changing Urban Environment, the workshop's detailed findings will be used to create a white paper summarizing how leaders in the water sector are handling current challenges. A full set of results will be made available to the public on www.waterdialogue.com. The event is part of the Black & Veatch's award-winning, global Water Dialogueseries.

About Black & Veatch
Black & Veatch is a global leader in the consulting, engineering, construction and operation of what the world needs now and in the future in the crucial areas of energy, water and telecommunications and in providing up-to-the-minute services in the fast changing federal and environmental markets. Founded in 1915, the employee-owned, $2.3B company operates out of more than 110 offices worldwide and has completed projects in more than 100 countries. For more information, visit www.bv.com

SOURCE: Black & Veatch

BASF buys INGE Watertechnologies
from Emerald Technology Ventures - they were all with us!

Clean-tech water and environmental sector set for uplift in M&A and investment activity – analysisProprietary Intelligence.

• Water treatment services, desalination and conservation companies viewed as attractive investments
• BWT, Wavin, Pall Corporation seen as possible takeover targets
• GE, Siemens, 3M, Danaher, Uponor and Veolia viewed as sector consolidators

Clean-tech companies operating in the water treatment and environmental services sectors are likely to see a high amount of investment and M&A activity over the next few years. The high returns on offer, coupled with emerging market exposure and the opportunity to get involved in some new and exciting technologies, is set to drive consolidation.

Dealmakers, including asset managers, venture capital firms and sector experts, all agree that with demand for fresh water set to rise dramatically over the next decade, companies with new technologies based on conservation, desalination and waste water treatment will all be highly attractive to investors.

“This is red-hot sector for M&A at the moment,” said Simon Gottelier, an investment manager at Impax Asset Management, a specialist firm that focuses on the environmental sector. “We’re beginning to see a new round of takeover activity, especially at the micro-cap end of the market.”

He pointed to companies in water treatment services – filtration, membrane technology and monitoring and testing equipment – as high on the list of potential takeover targets, while manufactures of pumps, pipes and valves, and those involved in smart metering, are also likely bid candidates.

“There are some strong takeover targets around,” he told this news service at a recent ‘Investing in Water’ seminar in London. He cited BWT Group, an Austria-listed water infrastructure services company, as a possible bid target, while Wavin, a Dutch waste water management company, could also be vulnerable to a takeover. Gottelier also mentioned US-headquartered Pall Corporation, a filtration specialist as another possible target.

He said potential buyers of assets could include conglomerates such as General Electric, Siemens, 3M and Danaher, who are all keen to increase their exposure to the clean-tech sector.

Gottelier said while early stage and fledging companies were hard to value, recent takeout multiples in the sector were around 6.0x to 8.0x EBITDA. “For companies with proven technologies and who are further up the value chain, multiples of between 10.0x to 14.0x are possible,” he added.

Gottelier also mentioned Uponor, the Finnish building products group as a potential buyer of assets, and Veolia, the French utilities giant. Veolia has just set up a new investment offshoot – Veolia Innovation Accelerator – specifically designed to invest in companies whose technologies can be used in its own waste water, energy and transportation business.

Wayne Evans, vice president of Veolia’s water solutions and technologies division, believes the emphasis will be on resource recovery and water and carbon footprint reduction. “There is not a better time to invest in this industry segment. The larger players will need to partner with innovative companies and, in return, the industry can offer specialist expertise in laboratories and in the field, as well as access to funding.” Veolia is particularly keen on companies operating in the bio-refinery and chemicals and metals recovery business. “Companies that can extract metals, phosphorous and caustics from waste water for re-sale are particularly attractive,” Evans told this news service.

Nityen Lal, managing director and a general partner of Icos Capital, a Netherlands-based clean-tech venture capital fund, highlighted waste water treatment and diagnostics companies as two attractive areas for investors. He believes European countries, such as The Netherlands and Germany, where utility firms are being pushed to adopt new technologies, will lead the development. “Countries such as India and China will also see large ‘Veolia-type’ players emerge as the continued investment in infrastructure in these and other emerging markets gathers pace.”

Gottelier believes the continued industrialisation and urbanisation of countries like China and India will lead to investment opportunities. “De-regulation and privatisation is a major opportunity here. Legislation and regulatory issues will generate growth. On the downside, the investment risks include exposure to the construction cycle, raw material costs and regulatory changes,” he points out.

But with just 1% of the world’s water deemed as potable, Gottelier said he believes the overwhelming investment rationale for water remains sound.

The World Bank estimates that USD 180bn of water infrastructure investment will be needed each year until 2030 to meet freshwater demand.

Tom Whitehouse, CEO of Carbon International, a clean-tech fund-raising consultancy, believes a huge amount of investment is going to be required to meet this demand. “Climate change and population growth are placing a lot of pressure on the existing infrastructure. While the water industry has always been quite conservative and not overly receptive to innovation, it’s realising that technology is going to play an increasing role in its future. Utilities are particularly interested in improving their efficiency, so I think this will be a key growth area from a VC perspective.”

The recovery in debt markets and the return of IPO activity is also helping to support the investment rationale and, given the more favourable investment backdrop, some companies are now actively seeking fresh funding and looking for new investors. Others have set their sights on a potential IPO or trade sale in a few years' time.

Dutch Rainmaker, a company that has developed an ‘air-to-water’ technology using wind turbines, is looking for a new investor prepared to invest between EUR 3m and EUR 6m.

Bactest, a newly formed UK company that has developed a number of products to test for contamination in liquids, is looking for new investors to provide GBP 1.25m of early-round funding. A second round of GBP 3m could follow in 2012, according to group Chief Executive Professor Annie Brooking. She added that a potential exit for investors could be a trade sale or break-up of the company.

Resolute Marine Energy, a privately owned, Boston-based wave energy group, is also looking for investors. Group CEO Bill Staby said the group had already engaged in talks with Veolia’s Innovation Accelerator fund and pointed to firms such Lockheed Martin and Dresser-Rand, two US-based conglomerates, and Denmark-headquartered valves and fluid handling group Danfoss as companies who may be interested in the group’s technology.

Zeropex, a privately owned, Norway-based company that has patented an innovative micro-hydro generator for use in the water industry, is also looking raise an additional USD 10m. It could contemplate an IPO or trade sale over the next few years, according to Managing Director Duncan Collins.

by Malcolm Locke