Water Acquisitions Rise: Will Venture Capital Follow?

Feb 28, 2012

Mergers and acquisitions of water companies jumped last year, even as venture-capital deals in water technologies fell, Cleantech Group CEO Sheeraz Haji told me Wednesday. Global water acquisitions totaled $12.7 billion in 55 deals in 2011, up from roughly $900 million in 40 deals in 2010. Meanwhile, venture-capital investments in water dropped to $224 million in 40 deals in 2011 from $272 million in 53 deals in 2010.

The mergers-and-acquisitions number is weighted by a couple of big deals, which make it difficult to tell whether the increase signals a trend or merely a one-time spike. Minnesota-based Ecolab, which makes cleaning supplies, in July bought Nalco Holding, a waste- and water-treatment company in Illinois, for $5.4 billion. And Hong Kong infrastructure company Cheung Kong Infrastructure Holdings bought Northumbrian Water, which supplies water and wastewater services, for $3.9 billion. Those two large deals made up 73 percent of last year’s total, meaning that most of the deals were much smaller.

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