Capital Calls: The Culligan water deal machine changes hands
25/05/2021 15:48
(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
NEW YORK, May 25 (Reuters Breakingviews) - Concise insights
on global finance.
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DILUTIVE ACCRETION. Culligan International is part of the deal
flow, again. Private equity firm BDT Capital Partners https://www.businesswire.com/news/home/20210525005531/en/Culligan-International-Announces-Acquisition-by-BDT-Capital-Partners-from-Advent-International-and-Centerbridge-Partners
is taking a stake in the water-treatment firm, valuing it at $6
billion including debt, according to the Wall Street Journal https://www.wsj.com/articles/bdt-capital-to-buy-culligan-from-advent-centerbridge-11621940400.
That is more than six times what its current majority owner,
leveraged buyout shop Advent International, paid in 2016 https://www.wsj.com/articles/advent-buying-culligan-from-centerbridge-for-about-915-million-1478126301?mod=article_inline.
Culligan has done some 90 deals in the five years since then.
Roll-ups can become unstuck when a company runs out of
targets or enthusiasm for its product slows down. But water
management has only gained in importance and value as climate
change has put fresh drinking water at risk in many parts of the
world urn:newsml:reuters.com:*:nL4N2LK0KC. Similar Japanese company Organo’s 6368.T
shares have more than tripled in five years, versus an 87%
return for the Nikkei 225 Index and a 121% return for the S&P
500 Index.
Culligan is something of a mulligan stew of water
assets. But the commodity's scarcity and the company's
experience absorbing other businesses could keep the next owners
nicely hydrated. (By Lauren Silva Laughlin)
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