AEA Investors Buying Siemens Water Technologies for $865 Million

Andrew Klips  |

Siemens AG (SI) confirmed on Wednesday that it has agreed to sell a portion of its water technologies business to New York-based private equity firm AEA Investors LP for 640 million euros, about $865 million.  The deal entails the municipal, industrial and services water and wastewater treatment operations of Siemens Water Technologies ($SWT), a part of Siemens larger water unit.

AEA focuses on control buyouts in four industry sectors: value-added industrial products; specialty chemicals; consumer products/retail and services.  With offices around the world, AEA manages funds that have $6.5 billion of invested and committed capital.

Siemens, a Germany-based industrial conglomerate, put the unit up for sale in 2012 (as well as three more of its businesses), aiming to consolidate operations and bolster profitability.  In 2012, Siemens also put a For Sale sign in front of its solar assets, including Solel, an Israel solar thermal power plant builder it bought in 2009 for $418 million.  When it didn’t sell, Siemens spun-out Osram Licht AG to its shareholders.

Another part of its reorganization plans unveiled in September included slashing 4 percent of its staffers, about 15,000 jobs, within one year.

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Siemens said in a statement that it now intends to “focus on water and sewage treatment plants and seawater desalination plants.”  Siemens bought the business, then called USFilter, from Veolia Environnement for $993 million.  At the time, it had about 5,800 employees and was doing $1.2 billion annually in sales.  Currently, SWT has about 4,000 employees, 3,000 of which are in North America.

Siemens noted that a fragmented market was another driver in its decision to sell the business, saying previously that the bulk of the SWT business is geared towards U.S. standards and the rest of the world is fragmented with local solutions dominating the markets.

In an interview with Water & Wastewater International magazine last year, Siemens Water Technologies chief executive Dr. Luka Loeffler said, “Looking at the water treatment business that we run as a process company, I think this is clearly outside the main scope of Siemens Industry’s future strategy.”  

“Together with AEA, we will continue building on our wide range of enduring brands and advanced water and wastewater treatment technologies to help our customers more cost-effectively meet their water needs now and in the future,” Loeffler commented in a statement today.

ADR shares of SI are up about half a percent in Wednesday action with the news, trading at $125.50.  So far in 2013, shares have grown by about 20 percent through Tuesday’s close.

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