Featured Professionals: Luke Semple, Brent Spiller, Greg Waller

Water is an essential resource and critical infrastructure priority, generating ongoing demand and investor interest across the water services value chain.

Here we further explore the sector’s M&A momentum, profiling several recent clients that demonstrate the opportunity.

Sustained Funding, Evolving Standards Drive Demand

Years of underinvestment have left many aging water and wastewater systems in need of repair, replacement, and modernization, creating sustained, non-discretionary spending by municipalities, utilities, and private asset owners.

“Anchored by substantial infrastructure funding, companies that inspect, maintain, and improve water and wastewater infrastructure will keep seeing strong demand,” says Greg Waller, a managing director in our Energy, Power & Infrastructure Group.

At the same time, rising regulatory scrutiny, shifting water quality standards, and expanding environmental concerns are bolstering the complexity of managing these systems as well as the importance of specialized expertise. Relatedly, emerging needs surrounding PFAS treatment, water reuse, and long-term stewardship of both public and private water bodies are creating additional avenues for growth and innovation.

“Water network operators are looking for ways to optimize their assets while meeting stricter performance and compliance requirements,” says Luke Semple, a managing director in our Energy, Power & Infrastructure Group. “Digital monitoring solutions, automation technologies, treatment systems, asset management platforms, and specialized environmental services are all poised for success.”

Engagement Spotlight: An Ecosystem of Growth

A sample of recent clients shows the heightened investor interest in businesses serving the water, wastewater, and water treatment ecosystem.

USG Water Solutions provides water asset management services for municipal and private water customers throughout North America. Harris Williams advised USG, a portfolio company of Turnspire Capital Partners, on its sale to Warren Equity Partners.

USG’s range of capabilities include maintenance services for water storage tanks, pipe networks, and concrete structures in water and wastewater plants, as well as smart metering programs and water quality technologies. “Investor appetite for water and wastewater solutions is accelerating, with private equity as a significant driver,” says Waller. “USG has created a strong market position while expanding geographically, and Warren Equity Partners will help the company pursue further strategic growth initiatives.”

AQUALIS brings sustainable water compliance, quality testing, and management services to multistate and single-site organizations. Harris Williams advised AQUALIS, a portfolio company of DFW Capital Partners, on its sale to Fusion Capital Partners.

AQUALIS has built nationwide scale and a comprehensive set of services, enabling it to address all its customers’ needs across geographies. “With Fusion Capital Partners’ support, AQUALIS will capitalize on the momentum in stormwater and wastewater management while accelerating its growth through both organic and inorganic initiatives,” says Semple.

Jones Lake Management offers professional pond and lake management capabilities such as annual, recurring pond and lake treatment services; fish stocking; aeration systems and services; and algae and aquatic weed management. Harris Williams advised Jones Lake Management, a portfolio company of Fort Point Capital, on its sale to Leonard Green & Partners.

Through its science-based solutions and biology expertise, the company brings immense value to a diverse group of residential, commercial, and municipal customers. “Jones Lake has become a leader in specialized aquatic solutions which are increasingly in demand,” notes Brent Spiller, a managing director in our Consumer Group. “Going forward, Leonard Green’s proven track record in the business and consumer services space will help Jones Lake scale into a clear sector leader.”

Deep Potential

The water services sector gives investors a compelling combination of resilient demand, recurring revenue characteristics, regulatory-driven spending, and exposure to essential infrastructure.

“Whether through services, equipment, treatment solutions, or technology, companies that maintain, enhance, and safeguard water assets are increasingly on investors’ radar,” says Semple.

To further discuss opportunities in water services, please contact our senior professionals.