Empire in peril
- From: Vol 3, Issue 8 (August 2012)
- Category: Need to know
- Region: Americas
- Country: United States
- Related Companies: American Water, Cal Water, California Public Utilities Commission (CPUC), Connecticut Water, MJK Automation A/S, Mueller Water Products, Pentair, Siemens Water Technologies , Standard & Poor’s, Tyco Flow Control, Underground Solutions Inc, Wallace & Tiernan and Xylem
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Underground Solutions has agreed to acquire Siemens’ Wallace & Tiernan (W&T) ChemFeed business, including W&T’s chemical feed systems, chemical metering pumps and process controllers.
- Former Siemens executive vice president Joe Millen will end his retirement to run W&T.
- Further shuffles within the Siemens Water empire seem inevitable. Siemens Water sold its labs business earlier this year, and is widely believed to be on the cusp of selling its General Filter and Microfloc brand water treatment products.
- Pentair is expecting $250 million in synergies from its pending merger with Tyco Flow Control over the next three years. Pentair CEO Randy Hogan said Pentair’s operating profits rose 11 percent in 2QFY2012, but that the market for municipal sales has been essentially flat.
- Xylem boosted its analytics business by acquiring Danish firm MJK Automation A/S for $12.3 million. MJK, which manufactures sensors, generated $10.7 million in revenue in the fiscal year ended June 30. Xylem’s analytical instrumentation segment generated revenues of $220 million in FY2011.
- The recovery of Mueller Water Products continued, as Brean Murray upgraded its investment thesis on shares of Mueller from “Hold” to “Buy” based on the U.S. housing market recovery and Mueller’s recent meter contract with American Water.
- Meanwhile, Brean Murray downgraded its outlook on shares of American States Water to “Hold” based on what it considered to be a fair valuation. American States’ share price rose 8 percent in 2QFY2012, closing at $39.58 on June 29.
- Standard & Poor’s revised its ratings outlook for American Water Works from “stable” to “positive,” citing a one-in-three probability of continued financial improvement that would support a one-notch upgrade. S&P affirmed AWK’s corporate credit (BBB+) and commercial paper (A-2) ratings.
- Connecticut Water filed a registration statement to issue 1.7 million shares at $29.34 apiece in order to raise approximately $49.9 million. The company needs to adjust its gearing to take account of the $36 million acquisition of Aqua Maine and the impending $19.8 million Biddeford and Saco purchase.
- Cal Water filed a general rate case with the California Public Utilities Commission. Cal Water is requesting revenue increases of $92.7 million in 2014, $17.2 million in 2015 and $16.9 million in 2016. A decision is expected in December 2013.