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🔬 "Water M&A, Recent Deals, Trends & Outlook"

Photo by Patrick Perkins | Unsplash
Host: Steph Aldock
Guest: Reese Tisdale | President | Bluefield Research
Category: 🔬 Research | Water Sector

Podcast’s Essential Bites:

[2:22] RT: "M&A activity is down across the board. It's not just the water sector. [...] And largely because of all the global uncertainty, whether it be energy prices in Europe, whether it be inflation globally, supply chain issues. [...] We've recorded 193 acquisitions [in the water sector] in 2022. [...] Last year, by the end of the year, we hit 511 deals."

[4:57] RT: "When you start looking at technology, hardware, and services companies, those deal values seem to have fallen dramatically over the last couple of months. [...] The flip side of that, however, [...] utilities and utility assets themselves, the price seems to be climbing. We've seen a couple of really expensive deals, you've seen some Pennsylvania deals that have been pretty expensive for utilities."

[14:58] RT: "A lot of money [is] going to the water sector. And it's not just the 55 billion [from the Infrastructure Investment and Jobs Act]. [...] When you start looking at transportation, the power sector, there's water management, and water technology and solution opportunities in those spaces. [...] So that in my mind is a water opportunity. So policy and regulatory wise, I think the tailwinds [...] are pretty strong."

[15:37] RT: "I think that the difficulty [...] is going to be executing on spinning all of those dollars. And we still have a workforce shortage problem. There's some technology issues in the sense of deploying it, managing it."

[17:14] RT: "Deal flow does pick up towards the close of the year, as people are trying to close out their books. [...] So that happens definitely in the utility space, but also other deals. [...] Money is more expensive now than it was six months ago. If you need capital and you've got to borrow it, it's getting pretty expensive. So if you're a wounded lamb [...], there are plenty of companies that are well resourced, well capitalized, that are opportunistic, and definitely willing to buy at the bottom."

Rating: 💧💧

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🗓️ 10/11/2022
✅ Time saved: 21 min