Why Xylem Is Buying Evoqua For $7.5 Billion (XYL) (AQUA)

By Amit Chowdhry ● Jan 24, 2023
  • Xylem (XYL) announced it is buying Evoqua (AQUA) for $7.5 billion. This is why.

Xylem Inc. (XYL), a leading global water technology company and Evoqua (AQUA), a leader in mission-critical water treatment solutions and services, announced they have entered into a definitive agreement under which Xylem will acquire Evoqua in an all-stock transaction that reflects an implied enterprise value of approximately $7.5 billion.

As water risks rise in global importance, this deal unites 2 companies with a shared focus on solving the world’s water challenges by addressing customers’ and communities’ most critical needs. And building on Xylem’s global leadership in water solutions and Evoqua’s leadership in advanced treatment solutions and services, the combined company will be uniquely positioned to develop and deliver an even more comprehensive offering of innovative solutions.

Evoqua, a leader in North American water treatment, complements Xylem’s distinctive portfolio of solutions with advanced water and wastewater treatment capabilities, which is a powerful and extensive network of service professionals and access to a number of attractive industrial markets with resilient and recurring revenue streams.

Evoqua’s solutions – including digitally enabled offerings – optimize, and outsource mission-critical water treatment systems for customers in high-growth sectors like life sciences, microelectronics, power, and food and beverage. Plus, Evoqua is a leader in the remediation of emerging contaminants, including PFAS.

Xylem and Evoqua generated over $7 billion in combined revenue in the 12-month period ending September 30, 2022, with $1.2 billion in adjusted EBITDA. And the combination unlocks compelling new growth opportunities and is expected to deliver run-rate cost synergies of $140 million within three years, driven by scale efficiencies in procurement, network optimization, and corporate costs. Plus, the transaction allows Xylem to maintain its strong balance sheet, which provides the combined company with significant strategic flexibility and optionality.

Transaction Details

Evoqua shareholders will receive 0.480 shares of Xylem for each Evoqua share, representing a value of $52.89 per share or a 29% premium based on Xylem and Evoqua closing prices as of January 20, 2023.

The deal, which is anticipated to close in mid-2023, is subject to approval by shareholders of Xylem and Evoqua, the receipt of required regulatory approvals and other customary closing conditions.

Upon closing, Xylem shareholders will own approximately 75 percent and Evoqua shareholders will own approximately 25 percent of the combined company on a fully diluted basis.

Following the closing, the combined company will continue being led by Patrick Decker, Xylem’s President and CEO. Two current members of the board of directors of Evoqua are expected to join Xylem’s board of directors.


“Solving the world’s water challenges has never been more urgent. Our acquisition of Evoqua creates a transformative global platform to address water scarcity, affordability and resilience at even greater scale. The combined company delivers an unparalleled portfolio of advanced technologies, integrated services and application expertise across the water cycle.”

“Together, our complementary businesses will be even more strongly positioned to help our customers and communities tackle their most challenging water needs. We are excited about building the world’s most powerful platform for solving water alongside our Evoqua colleagues.”

— Patrick Decker, President and CEO of Xylem

“Joining forces with Xylem is an exciting opportunity for Evoqua and for our team members. This combination provides a platform to leverage our combined strengths and increase our impact to better address the most pressing and increasingly complex global water challenges. I am incredibly proud of what our team at Evoqua has achieved to date, providing mission-critical water treatment solutions to the market and for our customers. Along the way, we have earned a reputation for quality, safety and reliability around the world. Together with Xylem, we will drive innovation on a larger scale for our customers, positioning us to create even more value for our stakeholders.”

— Ron Keating, Evoqua’s President and CEO