XPV Water Partners and KKR Form Global Nutrient Management Platform

A new impact-driven partnership will deliver end-to-end solutions for one of the world’s most pressing water problems.

Pollution consistently ranks highly in the list of the world’s growing water concerns. In addition to microplastics, pharmaceuticals, and many other emerging pollutants, high concentrations of nutrients, specifically nitrogen and phosphorus, are part of the rapid and expanded growth of harmful algae blooms, which pose serious risks to humans, animals, and ecosystems.

Exacerbated by a changing climate, large volumes of nutrients enter waterways through runoff from agricultural operations with an increased use of fertilizers, stormwater overflows from increasingly developed cities, and wastewater effluent from municipal and industrial plants.

“You don’t have to spend a lot of time studying the water sector to understand that nutrient management is one of the industry’s biggest challenges,” says David Henderson, Managing Partner, XPV Water Partners. For more than a decade, the water investment fund has tracked the changing dynamics and long-term trends of the water sector, including challenges, regulations, solutions, and enforcement.

“Wastewater treatment facilities face increasing regulatory pressure to meet strict nutrient reduction targets,” Henderson says. “Given the vast range of point sources, it takes different approaches to solve these challenges. There is no ‘one size fits all’ solution.”

Building up market leaders

There is, however, a small group of market leaders that offer scalable nutrient management solutions. As part of a series of strategic investments, XPV partnered with two leading companies that offer complementary innovative water technologies: Nexom and Environmental Operating Solutions, Inc. (EOSi).

  • With more than 750 successful installations, Winnipeg, Canada-based Nexom enables new and existing wastewater treatment plants to meet their effluent discharge targets using a portfolio of proprietary and acquired biological and filtration-based technologies.
  • Based in Massachusetts, EOSi offers non-hazardous and environmentally sustainable glycerin-based chemicals and technical services for biological nutrient removal applications in wastewater systems.

As XPV Water Partners portfolio companies, Nexom and EOSi have worked closely with the water investment fund’s experienced team to identify, validate, and pursue M&A, talent, and market opportunities to grow and differentiate their businesses. For instance, Nexom has acquired three technologies to expand the company beyond its core product, while EOSi has built upon talent and market strategies. Both companies have impressive teams and leading technical solutions, and investors are taking notice.

Growth for good

Globally, impact-driven investment is changing the course and language of economic growth. Many of the world’s largest private equity firms are turning their attention to the Sustainable Development Goals, which provide a shared blueprint for peace and prosperity for people and the planet.

When XPV Water Partners met global investment firm KKR, both organizations learned they shared similar values. “We are determined to be active investors and achieve social and environmental impacts,” says Henderson. “Together, we decided to take action and build a solutions platform to address the nutrient challenge from end to end.”

The platform will include a diversified and growing portfolio of innovative water solutions for municipal and industrial wastewater treatment facilities. As market leaders and foundational members of the platform, Nexom and EOSi will play a significant role in the next stages.

“Both companies have unique, proprietary technologies that give them a strong competitive advantage. Their solutions are referenced and trusted, and they have great potential to continue growing globally,” Henderson says. “They are well-positioned to lead the charge.”

With more acquisitions to come, Henderson sees a clear pathway to bringing a portfolio of innovative water technologies and services to enable better nutrient management in cities and across all industries. “With this platform, we’re aiming to fill the gaps, fulfill demand, and create value on a global scale,” he says.