NR2309

NEWS RELEASE                                                                                        DECEMBER 2016

Who Should Purchase GE Water?

Hundreds of companies in the water business as well as private investors will be considering the purchase of GE Water. The first conclusion in a cursory review will be that this is a group of individual companies which operate independently and are not necessarily in the same markets.  There are companies selling systems and major components, small components, instruments and consumables such as treatment chemicals.

The management of these businesses is challenging because of their diversity.  The way you manage an effort to supply $50 cartridges is totally different than the way you manage an effort to sell knowledge which is bundled into the price of formulated chemicals. The management of a company which sells complete zero liquid discharge (ZLD) systems requires skills not required in some of the other businesses.

Danaher has been mentioned in the media as a potential purchaser.  Their recent Pall acquisition has made Danaher a major player in pharmaceutical and chemical industry filtration.  GE Water is focused more on power, oil and gas, refining and to a lesser degree on various water-related purification.  So, the industry alignment is complimentary.

Xylem has grown the test segment of its transport, treat and test efforts. Its instrumentation or test business is mostly in municipal water and wastewater and compliments the GE instrumentation applications.

Other water chemical formulators such as Ecolab and Solenis and basic water chemical suppliers such BASF and Kemira are also potential purchasers.

Any of the large companies in the air, water, liquid, gas flow and treat businesses with an industry total revenue of $323 billion are potential purchasers.

Air/Water/Gas, Liquid Flow and Treat Revenues 

$ Millions

Product Power Fluid Municipal Industrial and Other Residential/
Commercial
Total
Flow (Water)
Pumps 3 8 14 20 8 53
Valves 7 13 7 39 20 86
Subtotal 10 21 21 59 28 139
Liquid Treatment
Cartridge 0 7 1 6 7 21
Sedimentation/ Centrifugation 1 0 2 5 0 8
Cross Flow Membranes 2 0 4 3 1 10
Macrofiltration 1 0 2 4 0 7
Subtotal 4 7 9 18 8 46
Oxidation and Destruction (Water)
Biological/Oxidation/Destruction 1 0 8 4 2 15
Water/Wastewater Chemicals 5 0 9 10 0 24
Subtotal 6 0 17 14 2 39
Indoor Air Treatment
Filtration/Purification 1 2 0 3 5* 11
Stack Gas Treatment and Flow
Fabric Filter 1 0 0 5 0 6
Scrubber 0 0 1 5 0 6
Precipitator 7 0 0 1 0 8
FGD 7 0 0 0 0 7
DeNOx 6 2 0 1 0 9
Thermal/Catalytic 0 10 0 2 0 12
Fans and Compressors 4 2 2 12 5 25
Subtotal 25 14 3 26 5 73
Monitoring
Air 1 1 1 1 3 7
Water 1 1 3 2 1 8
Subtotal 2 2 4 3 4 15
Total           323

* includes vacuum bags and face masks as well as HVAC

GE Water Coverage  

        

The GE water treatment chemicals business is of greater value as the percentage reduction of end user knowledge to total knowledge continues to shrink.  The formulated chemicals business is more problem solving with the right combination rather than sale of a product.  Knowledge of the applications is critical.  With the development of the smart sensors, the formulators can become remote operators or continuous advisors rather than just offering periodic advice as part of the chemical sale. Will potential investors fully recognize this opportunity?   If they do, the potential buyer will be one who can best leverage this very large potential.  The expertise in the use of chemicals along with filtration, valves, pumps, etc. will all create a very large remote advice, operations and preventive maintenance revenue opportunity.

The various relevant market reports for an evaluation of this opportunity are shown at: Markets