【United States】M&A, Rise and Fall of the Water Purification Equipment Industry

1st. Clusters of Home Water Purifier Companies in the U.S. 

The manufacturers and distributors in the U.S. home water purifiers industry are mostly clustered in California and Florida. This is the reason why the WQA (Water Quality Association) Convention & Exposition is mostly organized in these two states. Quite a few times the WQA Convention & Exposition is held in Las Vegas in Nevada as well. Nevada is a desert and few people would set up factories, warehouses or marketing presences here. The WQA Convention & Exposition in Las Vegas aims to attract exhibitors, possibly by offering an occasion for exhibitors to gamble and do some sightseeing. The WQA organizer can also have an easier time by shortening the expo from three days to two days, with an early finish on the second day. This is probably the American way of being romantic.

2nd. Rise and Fall of the U.S. Water Purification Equipment Industry 

The WQA Convention & Exposition as the most representative tradeshow for the U.S. water treatment industry has been witnessing a drastic reduction in the number of exhibitors and visitors over recent years. This reflects the change of the industry. The expo still happens in every March, typically in a different state each year. However, the number of exhibitors and hence non-buyer visitors keeps shrinking. Does this mean:

1. The U.S. market for water purification equipment has matured and saturated?

2. The U.S. manufacturers, no longer competitive vs. foreign competitors, have relocated facilities to Asia?

Examples：

2.1  KX Technologies has moved most of its facilities for extruded carbon filters to Singapore and India.

2.2  Pentair still maintains its production site in Minnesota. However, most of its production capacity was moved to Suzhou, China, in 2001.

2.3 Paragon also shifted some orders to Zhongshan, Guangdong Province, China, and set up production facilities there in 2010.

2.4 Purolite has three production sites, in the U.S., Romania, and China, respectively. The company set up a resin factory in China as early as 1995.

3rd. M&A Activities in the U.S. Water Purification Equipment Industry 

M&As in different industries of the U.S. are a world-famous phenomenon. The companies in the water purification equipment industry are also part of it.

1 The most high-profile merger is between DuPont and Dow Chemical. Down Chemical’s subsidiary Filmtec is a well-known player in RO (reverse osmosis).

2 The second in line is Pentair’s acquisitions of numerous brands: Everypure, SHURFLO, STA-RITE, Fiberdyne, Fleck, and Structure...

3 In 2005, 3M acquired Cuno for US$1.35 billion.

4 Culligan, a U.S. company, acquired 100% of the Spanish company Hidro Water at the end of 2018.

5 The U.S. company Kinetico acquired 50% of Puricom Europ (a joint venture between the Spanish company Ionfilter and the Taiwanese company Puricom).

6 Canature North America (with the Chinese parent company Canature) acquired Water Group in the U.S., Canada, and Mexico in 2014 and Envirogard in Canada in 2019.

7 In 2018, the U.S. company Paragon sold its production facilities in Zhongshan, Guangdong, China to Culligan.

4th. Existing Production Facilities in the U.S. Water Purification Equipment Industry

Not many U.S. companies dedicated to the manufacturing of water purification equipment and components. Of course, companies choose the best course of action given the rising labor costs and the difficult in recruiting factory operators in the U.S. More and more brands close down manufacturing activities and become importers and distributors. This saves a lot of troubles associated with production. Below is a list of the few manufacturers still toiling away in the U.S.

4.1Those focus on water purification materials and technology:

1 KDF

2 Selecto Inc. – lead reduction solutions

3  Columbia River – calcite, carbonates

4 Graver Technologies - MetSorb (a heavy metal remover for arsenic, etc.)

4.2Those who focus on RO (reverse osmosis) water purifiers:

1 Ecowater

2 Kinetico

4.3Those who focus on water dispensers/coolers:

1 Natural Choice

2 Oasis

4.4Those who focus on water purifiers:

1 Paragon

4.5Those who focus on components:

1. Cuno, OmniPure - filters

2. KX, Multipure - extruded carbon filters

3. Aquasana, Sprite - shower filters

4. QMP - Brass fitting

Content of this article is free to use, but please attribute the source.

Author: Rodger Lin, Easywell Water Systems Inc.

November 5, 2020