Water, water everywhere: 8 deals aimed at improving treatment

'There is a tremendous wave of funding flowing down from the federal government that will result in the broader upgrade and improvement of our infrastructure over the course of the next five to 10 years,' said MSCP's Gian Turco.

The appetite to upgrade the country’s battered infrastructure has been growing over the years among policy makers, investors, developers and other stakeholders. In 2021, President Joe Biden signed the bipartisan Infrastructure Investment and Jobs Act that is aimed at overhauling US infrastructure. Private equity firms have been busy too, picking up deals in the infrastructure space. Today we are highlighting eight deals that focus on water management and treatment. All were announced in the first two months of this year, and we start with the most recent.

1. Boyne Capital acquires McKee Utility Contractors

Boyne Capital, based in Miami, is partnering with management in acquiring McKee Utility Contractors, a water and sewer infrastructure services platform that focuses on pipeline installation, replacement, tunnelling, and boring for water, wastewater, and storm water utility customers.

Founded in 1978, McKee serves municipal and utility customers across expanding population centers in Texas, Oklahoma and Arkansas, presenting significant runway for continued growth.

“We look forward to partnering with the McKee team and helping them capitalize on the considerable market opportunity available to grow both organically and strategically, while continuing to offer best in class service to their blue-chip customer base,” said Roman Krislav, Boyne Capital managing director in a statement.

2. Trivest Partners portfolio company HighGround Restoration Group acquires Expert Water Removal

HighGround Restoration Group, a portfolio company of Trivest Partners, acquired Bradenton, Florida-based Expert Water Removal, a property damage restoration company.

Expert Water Removal, founded by Barry Nicks Jr in 2006, specializes in water damage restoration, mold remediation, and fire damage restoration. The deal is expected to help HighGround expand its geographic footprint in Florida, said Reid Callaway, a principal with Trivest, in a statement.

“Expert Water Removal is an excellent fit with the existing HighGround family of brands and provides an attractive opportunity to extend our platform’s reach in West Florida,” said Callaway.

3. MSCP acquires environmental and infrastructure consulting firm Apex Companies

Morgan Stanley Capital Partners acquired Apex Companies, a Rockville, Maryland-based provider of end-to-end environmental and infrastructure consulting and engineering services from Sentinel Capital Partners, a New York-based PE firm.

Apex serves clients at the federal, state and municipal level, as well as a host of private sector clients within retail, industrial, real estate, technology, energy and financial services markets.

“There is a tremendous wave of funding flowing down from the federal government that will result in the broader upgrade and improvement of our infrastructure over the course of the next five to 10 years or even more,” Gian Turco, the firm’s vice president told PE Hub. “We think that Apex is currently squarely positioned to benefit from that by virtue of its existing capabilities in water infrastructure and water resources.”

4. KKR invests in foundation repair company Groundworks

KKR made a significant investment in Virginia Beach, Virginia-based Groundworks, a foundation repair and water management services company. Founded in 2016, Groundworks’ brands have served over one million customers in the US.

“Groundworks provides essential and highly technical services to homeowners across the country, with a differentiated business model and focus on customer excellence,” said Felix Gernburd, partner at KKR, in a statement.

5. Osceola Capital forms water treatment services firm Flotilla Partners

Tampa, Florida-based Osceola Capital formed Flotilla Partners, a company focused on providing water treatment and testing services for residential and commercial customers in Florida and the Southeast.

In conjunction with the formation of Flotilla, the company closed three acquisitions: Aquaflow, Filter Pure Systems and Land O’ Lakes Water Treatment, businesses that provide water treatment services and equipment to residential and commercial customers across Central and Western Florida.

“Flotilla will fill a critical gap in the home water treatment solutions industry – a scaled, super-regional platform specifically focused on the water treatment market with professionalized technology, processes and corporate infrastructure,” said Patrick Watkins, partner at Osceola Capital, in a statement.

6. Littlejohn acquires engineering and design services firm Ardurra

The Greenwich, Connecticut-headquartered Littlejohn & Co earlier this month acquired Ardurra Group, a Miami-based provider of multidisciplinary engineering and design services to water, transportation and aviation end-markets. Ardurra’s management team and employees will continue to own a significant portion of the business.

Ardurra provides highly complex engineering and design services for water, transportation and aviation end-markets across the United States, serving clients from municipalities, state government entities, utilities and businesses.

“We believe Ardurra is well positioned as investments in complex infrastructure – particularly focused around drinking water, water treatment and transportation – continue to accelerate,” said Michael Kaplan, a managing director at Littlejohn, in a statement.

7. Wind Point Partners buys water treatment solutions provider Hasa

Chicago-based Wind Point Partners acquired Saugus, California-headquartered Hasa, a provider of water treatment services. Hasa’s senior leadership team retained a “meaningful” ownership stake alongside Wind Point.

Hasa manufactures and distributes chemicals and ancillary products used for critical sanitization and maintenance of water systems, including swimming pools, water tanks and containment vessels for recreational, industrial and municipal end markets.

“Wind Point is a longtime investor in specialty chemicals and route-based services,” said Alex Washington, Wind Point’s managing director. “Hasa operates a differentiated distribution model that ensures customers receive safe, effective water treatment products. We are thrilled to partner with the company to build upon its reputation for exceptional service in this critical, growing market.”

8. OceanSound invests in engineering and infrastructure services firm Gannett Fleming

OceanSound Partners, a New York-based PE firm acquired Gannett Fleming, a Camp Hill, Pennsylvania-based infrastructure consulting company in January. Gannet’s services include engineering, architecture, and construction and program management in sectors such as transportation, water and electrification. It was founded in 1915.

In an interview with PE Hub, OceanSound Partners managing partner Joe Benavides said the demand to upgrade the infrastructure supersedes the current tight macroeconomic environment.

“We are not terribly concerned about demand in the near term because the needed investment in infrastructure is driving record levels of demand for Gannett and many of our peers in the market,” Benavides said. “We have a long view into revenue for the business since they have their largest-ever backlog and most infrastructure projects take years from planning to finish.”