Water treatment firm Xylem to acquire Evoqua

Xylem, which produces pumps, analytical instruments, and other water treatment equipment, plans to acquire Evoqua Water Technologies in a $7.5 billion all-stock transaction. The purchase will give Xylem advanced water treatment capabilities and access to customers in the life sciences, electronics, energy, and food industries. Evoqua also offers remediation for per- and polyfluoroalkyl substances. In addition, the acquisition will make industrial customers a much bigger part of Xylem’s business, which mostly serves the utility, commercial, and residential sectors. The deal is expected to close by midyear; it will give Evoqua shareholders a 25% stake in the combined company and represents a roughly 30% premium on Evoqua’s recent share price. Together, the firms are expected to have $7 billion in annual revenue. Xylem CEO Patrick Decker will continue to lead the company, and two representatives from Evoqua will join Xylem’s board. Evoqua shares jumped about 14% and Xylem shares fell about 8% after the announcement.