Triwater Holding Buying up Water Co's

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Triwater Holding Buying up Water Co's

Founder of US FIlter,Reardon,is Chairman and CEO of Triwater Holdings LLC backed by Three big PE FirmsHas Acquired Five Water Companies Since Its Start in 2011 and is Hunting for More

Mr. Reardon, 60, is chairman and CEO of Lake Forest-based Triwater Holdings LLC, which has acquired five water companies since its start in 2011 and is hunting for more. Investment capital isn't likely to be a problem. Mr. Reardon is backed by three sizable, local private-equity funds: Bolder Capital LLC, Edgewater Funds and JZ Partners LLC.

Triwater already has snagged one promising little firm,LMK Technologies Inc . in Ottawa, which has developed a technique and materials to reline and rehabilitate failing sewer pipes, saving municipalities and homeowners the cost of replacement. Mr. Reardon has attached another pipe-services firm, Perma-Liner Industries LLC of Clearwater, Florida, to LMK just as a trend toward so-called trenchless pipe repair has gained favor with civil engineers.

At the same time, Triwater has been investing in chemical treatment businesses such as Nashville Chemical & Equhttp://edit.chicagobusiness.com/apps/pbcsedit.dll/redipment Co. in Tennessee. All told, Triwater companies are on track to top $100 million in sales this year.

"We have some other deals we're considering right now," Mr. Reardon says. "We'd like to continue to bring in more companies to complement what we have, and we're also looking at other sectors of the water industry. We don't like to call this a roll-up. Instead, we call it a build-up."

Whatever it's called, the territory is familiar toMr. Reardon. He co-founded U.S. Filter in Palm Desert, California, in 1990 and served as chief operating officer under CEO Richard Heckmann as it made 300 acquisitions—staking a leading role in manufacturing equipment for sewage treatment plants, among other things—before it wassold to Vivendi SAof France for $6.2 billion in 1999. By then Mr. Reardon had migrated to suburban Chicago to take charge of one of U.S. Filter's biggest holdings, Culligan International Co., today based in Rosemont, which he continued to run for a few years under Vivendi.

None of Mr. Reardon's backers expects him to hatch another U.S. Filter. For one, there aren't as many acquisition targets today. Steve Maxwell, a water industry consultant and merger and acquisitions adviser in Boulder, Colorado, says the industry has been split among multinationals such as Germany's Siemens AG, now owner of parts of U.S. Filter, and rival Ecolab Inc. of St. Paul, Minnesota,which owns Nalco Inc.in Naperville. Both are prowling for deals. Big private-equity investors are shopping, too.

At the other end of the market Mr. Maxwell finds hundreds and even thousands of small, family-owned water companies, most with revenue of less than $10 million annually. "The problem is there aren't many acquisition candidates in that middle market," he says. "And what companies there are attract lots of interest and their prices are bid up. So investors like Triwater will be challenged."

Of the companies that Triwater has acquired, LMK stands out. Even rivals acknowledge the pluses of its technology, which installs patented water-tight clamps on pipes and pipe connections to reduce the volume of rainwater leaking into old pipes. That, in turn, frees up capacity at sewage-treatment plants. "The LMK products do a great job," says Kevin Nagle, a national accounts manager at TT Technologies Inc. in Aurora, itself a specialist in pipe repair and replacement.

Source: Chicago Business

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