Xylem Inc. (Xylem) has announced the US$7.5 billion acquisition of Evoqua Water Technologies (Evoqua), a leader in mission-critical water treatment solutions and services in the USA. 

Xylem and Evoqua are focused on solving the world's water problems. The combined company will develop and provide integrated offerings of water solutions and treatment services. The acquisition of Evoqua adds to Xylem's portfolio of solutions with advanced water and wastewater treatment capabilities, an extensive network of service professionals and access to a range of industrial markets. Evoqua services optimize and outsource critical water treatment systems for customers in sectors such as life sciences, microelectronics, power and food and beverage. Xylem and Evoqua generated more than US$7 billion in combined revenue over the 12-month period on an Adjusted EBITDA of US$1.2 billion. The combination of companies will generate operating run-rate cost synergies of US$140 million over 3 years.

Evoqua shareholders will receive 0.480 Xylem shares for each Evoqua share, which is US$52.89 per share or a 29 % premium based on the closing prices of Xylem and Evoqua. Xylem shareholders will own approximately 75% of the combined company, while Evoqua shareholders will own approximately 25%. 

Lazard and Guggenheim Securities acted as financial advisors and Gibson, Dunn & Crutcher LLP acted as legal advisor to Xylem. Goldman Sachs & Co. LLC and BofA Securities acted as financial advisors and Jones Day acted as legal advisor to Evoqua.