Veralto Corp. (VLTO) on Wednesday, Aug. 19, said it’s agreed to acquire industrial water treatment services provider Cleanwater1 Inc. for $465 million from Baird Capital Partners.
The Deal reported in June that an auction process run by Baird Capital parent Robert W. Baird & Co. for Cleanwater1 had headed to management presentations. It added that the business had been marketed on pro forma Ebitda in the ballpark of $30 million to $40 million.
Many of the financial sponsors that didn’t win the recent auction for Turnspire Capital Partners LLC water asset management services platform USG Water Solutions LLC were expected to participate in the auction for Cleanwater1, The Deal said.
Milpitas, Calif.-based Cleanwater1 provides water quality and wastewater treatment products and services, such as chemical feed and mixing, and disinfection and system optimization, to utilities and industrial facilities. The company also provides control panels and air filtration products.
Baird Capital invested in Cleanwater1 in 2022.
The purchase price in the Veralto deal represents roughly 17 times Cleanwater1’s adjusted Ebitda for the 12 months ended June 30, with Veralto adding that Clearwater1 had about $135 million in revenue.
The Deal earlier this month reported that industrial services providers focused on water and wastewater infrastructure have seen increasing M&A activity, leading multiples to soar, while the broader industrial and environmental services segment also continues to attract investor attention at a steady clip.
Waltham, Mass.-based Veralto, which was spun out of Danaher Corp. (DHR) in 2023, said Clearwater1’s technologies are complementary to its existing water treatment portfolio and will enable its expansion into adjacent, high-growth water treatment applications.
Veralto also expects to accelerate Cleanwater1’s growth rate by leveraging existing customer relationships, applying the Veralto Enterprise System and increasing Cleanwater1’s recurring revenue over time.
Veralto is divided into two segments: water quality and product quality and innovation, with a focus on safe drinking water and environmentally friendly packaging. The company has sales of around $5 billion, according to its website.
The Deal reported last December that Veralto was among potential bidders for French disinfectants giant Kersia Group that nevertheless had “significant obstacles” in their path. In November, the company agreed to acquire In-Situ Inc., an environmental water measurement and monitoring products provider, for $435 million in cash.
Chicago-based Baird Capital, the private investment arm of Robert W. Baird, invests in business-to-business technology and services companies across the U.S. and Europe.
In its last announced fundraising, Baird Capital raised $450 million for Global Fund III, which closed in April.
Veralto expects the Cleanwater1 transaction to close in the fourth quarter of 2026, subject to customary closing conditions.
Cleanwater1 used Baird’s Steve Guy, John Kinsella, Donald Bleifuss, Michael F. Lindemann, Nicholas R. Sealy and Jeffrey M. Seaman for financial advice.
Veralto CEO Jennifer L. Honeycutt and Cleanwater1 CEO David Stanton worked on the deal internally.
