capstone headwaters water infrastructure m&a coverage ... headwaters water...acquisition...

September 2020

WATER INFRASTRUCTURE

COVID-19 ACCELERATES DIGITAL ADOPTION

CONTACTS

Ted Polk

Managing Director

708-921-8961

[email protected]

Lisa Tolliver

Senior Director

773-791-9493

[email protected]

Pre-COVID trends of rapid urbanization and aging water and wastewater

infrastructure have been catalysts for innovation and advancement in the

Water Infrastructure industry. Notably, over 80% of water utilities providers

identify aging infrastructure as their top challenge (Black & Veatch),1

necessitating a substantial rethinking of how the nation’s water networks are

managed and maintained. While COVID-19 has stressed revenues and

financial visibility, it is accelerating the adoption of digital and remote

technologies to drive effective asset management, efficiency, and cost

reduction in water systems. “While the fundamentals are unchanged, other

dynamics are accelerating. Interest in digital adoption has clearly gained pace

as operators seek a step change in their operational and financial resilience. In

a constrained budget environment, they are rethinking how they spend their

money,” Patrick Decker, President, CEO, and Director of Xylem (NYSE:XYL)

commented in a recent earnings call.2

Public companies have combated COVID-19 headwinds, resulting in year-

over-year (YOY) revenue losses among top industry participants including

Mueller Water Products (NYSE:MWA)3 and Evoqua (NYSE:AQUA)4 recording

losses of -16.7% and -3.5%, respectively. However, valuations have improved

significantly following the depths of the pandemic and public players are

trading near yearly EV/EBITDA highs. A sustained recovery is likely to depend

on a resumption of demand among commercial and industrial end users as

businesses continue to reopen. Robust order backlogs and the need for

essential water services present a favorable backdrop for industry operators

providing scalable and cost-effective solutions.

TABLE OF CONTENTS

Industry Outlook

Segment Highlight

M&A Overview

Notable Transactions

Select Transactions

Historic Deal & Valuation Trends

Public Company Data

Firm Track Record

INDUSTRY OUTLOOK

2

Water Infrastructure

COVID-19 Accelerates Digital Adoption

0x

5x

10x

15x

20x

25x

Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20

Evoqua Mueller Suez Watts Water Veolia Xylem

EV

/EB

ITD

A

Tickers: AQUA, MWA, SEV, WTS, VIE, XYL; Year-to-date ended September 4

Source: Capital IQ and Capstone Research

Water Infrastructure Public Company EBITDA

March 11: WHO declares

COVID-19 a pandemic

utilities and service providers seek more transparency and

intelligence-based decision making in their systems’

management. Notably, global spending on digital

solutions is expected to grow eight percent annually from

2019 to 2024, amounting to $47 billion, according to

Global Water Intelligence.10

Following significant disruption at the onset of the

pandemic, trading metrics among public companies in the

Water Filtration and SCADA (supervisory control and data

acquisition) markets have rebounded substantially.

EBITDA multiples for Watts Water Technologies, Xylem,

and Pentair (NYSE:PNR) have all surpassed early 2020

valuations, trading near yearly highs. The pandemic has

encouraged top public players to reprioritize investment

with a focus on digital capabilities. Xylem has outlined

innovation plans with an investment focus on remote

monitoring and connectivity and interoperability

solutions, according to its earnings presentation. In

response to heightened interest in digital adoption, it has

accelerated the deployment of its information technology

platforms that drive efficiencies in remote engagement

and remote servicing. Notably, it will be deploying smart

metering, software, and network solutions for U.K.-based

Anglian Water, which will be implemented across

Anglian’s service area. Revenue recognition for the $90

million contract will begin late in the fourth quarter of

2020. In addition, Pentair launched its Pentair Home

application and has announced plans to introduce new

connected products in the near-term. Merger and

acquisition (M&A) activity has also supported the growing

demand for automation, remote monitoring, and

analytics, evidenced by VertexOne’s acquisition of

WaterSmart Software (see next page).

SEGMENT HIGHLIGHT: WATER FILTRATION & PURIFICATION

Despite water systems’ designation as critical

infrastructure, the pandemic has significantly disrupted

operations across the Water Infrastructure market as

industry service providers have combated project delays,

layoffs, and constrained industrial and commercial

demand. Steep declines in water use among commercial

and industrial users have contributed to a $12.5 billion

revenue shortfall for wastewater utilities, according to the

American Society of Civil Engineers.5 As a result, top

service providers are likewise encountering significant

challenges, with leading water solution providers Watts

(NYSE:WTS)6 and Xylem7 reporting revenue declines of

-18.7% and -13.9% in Q2, respectively. Amid tightened

budgets among operators, however, the pandemic is

magnifying the need for cost-efficient water filtration and

purification solutions, as the demand for ultrapure water

among municipalities and essential end markets remain

unchanged. In fact, according to Evoqua’s latest earnings

call,8 municipal [filtration] demand has remained relatively

stable throughout the pandemic, while end markets

catering to disinfection, pharmaceuticals, and

biotechnology have remained strong. However,

restrictions on entering residents’ homes and workforce

availability have delayed project deployments and

installations of certain water applications. Similarly, Xylem

has noted a 17% decline in revenue YOY in its

measurement & control solutions segment due to lower

levels of in-home meter replacement and installation.

While COVID-19 has delayed infrastructure projects, water

supply construction spending has remained relatively

resilient, increasing month-over-month in May and June

until falling modestly in July, according to the U.S. Census

Bureau.9 The pandemic has highlighted the need for

effective automation and remote monitoring capabilities

in the Water Infrastructure industry, typically an asset-

intensive market and often a laggard in incorporating

advanced technology, which is leading to growing

adoption of digital applications. For instance, social

distancing measures on job sites has encouraged the

application of automation and remote processes to limit

physical interaction among workers. As 56 million new

users are forecasted to be connected to centralized

wastewater treatment over the next two decades, water

filtration and purification monitoring remain inherent

societal needs that can be bolstered by advanced digital

offerings. Smart metering, remote detection, data

analytics, and advanced asset management represent

several applications that have seen heightened interest as

seek

3

Water Infrastructure | September 2020

EV

/EB

ITD

A

Water Filtration Public Company EBITDA


2019-2024 ANNUAL GROWTH IN

SPENDING ON DIGITAL SOLUTIONS8.0%

6x

8x

10x

12x

14x

16x

18x

20x

Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20

Watts Water Technologies Xylem

Pentair Dow Jones Industrial

STRATEGIC

PublicPrivate

FINANCIAL

DirectAdd-on

M&A OVERVIEW

4

M&A volume across all industries has fallen markedly, with

transaction activity among middle market companies

declining 22% in Q2 YOY, according to Capstone's Capital

Markets Update. The Water Infrastructure industry has

showcased more severe declines, with 91 transactions

announced or completed year-to-date (YTD) compared to

155 in YTD 2019, a fall of 41% YOY. Through much of the

first half of 2020, strategics (76% of deals) have employed

COVID-19 mitigation strategies including layoffs,

furloughs, and utilization of credit facilities while PE firms

(24% of deals) have focused on the health of platform

investments, promoting a more selective buyer universe.

In a tightened deal environment, targets with a robust

recurring revenue profile, expansive customer base, and

resilient end markets have garnered sustained M&A

interest. In addition, as COVID-19 has accelerated the

adoption of digital technologies, SaaS-based (software as

a service) offerings have become critical for effective

remote monitoring and analytics of water infrastructure.

Leading public companies have recognized the growth

potential for sophisticated technological applications that

drive cost savings and efficiencies and have utilized M&A

to bolster their offerings. Notably, Danaher (NYSE:DHR)

acquired Aquatic Informatics (July, undisclosed) through

its subsidiary Danaher Water Quality Platform. Aquatic

Informatics provides software solutions for critical water

data management, analytics, and compliance for the

Water industry.

Monthly Transactions

Year-To-Date Buyer Breakdown

Nu

mb

er o

f Tr

ansa

ctio

ns

Key Acquisition Traits in Current Environment

Recurring Revenue Profile

Revenue predictability and contract-based

cash flows are crucial, especially as many

industry players have struggled with visibility.

Resilient Operating Model

Water infrastructure is critical to municipalities and

essential end markets; demand in sectors including

Pharmaceuticals and Biotechnology have remained

strong through the pandemic.

Digital Technology Adoption

Smart metering, advanced asset

management, remote monitoring, and SaaS-

based platforms are key offerings.

Balance Sheet Integrity

Healthy balance sheet profiles have helped

major players navigate COVID-19 especially

amid delinquent water bill payments and

spending shortfalls.


The application of digital technologies to the water filtration and monitoring markets has drawn strong buyer appetite

through YTD 2020. Industry participants have pursued acquisitions of target companies that offer scalable, cost-effective, and

remote administered filtration and purification solutions. Notably, Sphere 3D (Nasdaq:ANY) has agreed to acquire Rainmaker

Worldwide, a global water-as-a-service provider, (OTC:RAKR) for an enterprise value of $215.1 million (July). Sphere 3D

operates as a data management, virtualization, and containerization provider that offers cloud-based, hybrid cloud, and on-

premise implementation. The acquisition of Rainmaker, which provides compact and scalable technologies for water

purification that enable decentralized deployment, represents the recognition among software providers of the growth

prospects in the tech-enabled water filtration and purification market.

2218

26

1317

20 2118

10 9

14 139

711

18

0

5

10

15

20

25

30

35

40

2019 2020

28.6%

47.3%

7.7%

16.4%

https://capstoneheadwaters.com/capital-markets-update-august-2020

NOTABLE TRANSACTIONS

5

Acquires

Acquires

GEF Capital has acquired leading provider of water and wastewater solutions, EnviroMix, for an

undisclosed sum. South Carolina-based EnviroMix offers cost-effective mixing and process control

technologies that drive enhanced nutrient removal, sustainability, reduced power requirements, and

regulatory compliance. EnviroMix’s innovative patented technologies leverage applications including

compressed gas and human machine interface to provide a low energy and minimal maintenance

solution for installation or upgrades of systems. It serves customers in the Water Storage Tank,

Municipal Wastewater, Industrial Wastewater, and Municipal Water Treatment industries.

GEF Capital is a private equity fund that seeks investment in companies that promote resource

efficiency and sustainability. Existing portfolio companies include Luminae, an efficient lighting

solutions provider, and Gro-Well Brands, a leading green recycling provider. The acquisition provides

Enviromix with additional capital resources and expertise to fuel expansion into new markets and

enhance its water treatment solutions.

The Vertex Group, operator of the VertexOne platform, has acquired leading provider of customer

engagement and analytics solutions to the Water Utility industry, WaterSmart Software, for an

undisclosed sum. WaterSmart offers a SaaS-based platform that leverages advanced leak algorithms to

detect and alert customers of potential leaks, bill forecast notifications, real-time consumption charts,

and mobile-friendly alerts and communications.

The acquisition expands VertexOne’s customer base to approximately 17 million end users and aligns

with its ongoing initiative to provide a robust suite of SaaS applications to facilitate critical asset-to-

cash business processes. In addition, as the Water industry increasingly adopts digital and innovative

technologies, WaterSmart represents the forefront of customer engagement and data analytics

capabilities. “With the continued adoption of advanced metering technologies in the Utility industry,

the WaterSmart cloud-based platform is redefining how utilities and their customers work together to

optimize the use of our precious water resources,” commented Kevin Kern, WaterSmart CEO in a

press release.13

GEF Capital Partners, LLC acquires Enviromix, LLC

(August 2020, Undisclosed)

The Vertex Group acquires WaterSmart Software, Inc.

(May 2020, Undisclosed)

Several notable transactions have been announced or completed in the industry in 2020. Select transactions are outlined belo w,

followed by a more comprehensive list on the following page.


Antin Infrastructure Partners has agreed to acquire a majority interest in Miya from Bridgepoint

Advisors for an undisclosed sum. Bridgepoint acquired Miya from Arison Investments in January 2019

for an enterprise value of $260 million.11 Miya provides urban water efficiency solutions to bolster

operational and financial performance to customers in Europe, Caribbean, and Africa. Through its

subsidiary Indaqua, it provides services to approximately 600,000 customers in Portugal through six

long-term contracts and one public private partnership (PPP). Miya has implemented over 200 water

efficiency projects globally for the the reduction of non-revenue water, or water lost during distribution.

The acquisition supports Miya’s growth prospects and the expansion of its global water efficiency

projects. “Miya is a best-in-class water operator with a solid base that will serve as a springboard to

capture the strong growth potential that exists in the sector. We are delighted to support Miya’s

management team in the next stage of the company’s development,” commented Mauricio Bolaña,

Partner at Antin in a press release.12

Antin Infrastructure Partners to acquire Miya Water Spain

(September 2020, Undisclosed)

To Acquire

Enterprise EV / LTM

Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

08/26/20FRANC

Environmental

Gryphon; Wind

River

Provides septic system and wastewater

management services.- - -

08/18/20 TranswaterPatriot

EnvironmentalOffers water management solutions for the Oil & Gas, Mining, and Solid Waste industries.

- - -

08/17/20 Enviromix GEF CapitalProvides mixing technology solutions for municipal and

industrial wastewater treatment plants.- - -

08/03/20 Water Now RigMax H20 Comprises water purification solutions business. $30.0 - -

08/03/20Midland GIS

Solutions

Surveying and

MappingOffers mapping and inventory collection on water, and sanitary sewer infrastructure.

- - -

08/03/20 GEOAnalyticalAce Products

& ConsultingProvides soil and water analytical testing. - - -

07/17/20 HASA GHK Capital Provides water treatment solutions. - - -

07/15/20Rainmaker

WorldwideSphere 3D Develops patented water purification technology. $215.1 - -

07/14/20Aquatics

Informatics

Danaher Water

Quality Provides software solutions for water data management and analysis.

- - -

06/23/20Environmental

DynamicsKKR

Develops technology and treatment solutions for municipal and industrial wastewater.

- - -

05/29/20Trihedral

Engineering

Delta

ElectronicsProvides windows-based monitoring and control software serving industries including Wastewater.

$32.6 - -

05/21/20Diversified Water

Utilities

Town of

Queen CreekOffers water distribution services. - - -

05/06/20WaterSmart

SoftwareThe Vertex Group

Provides cloud-based customer engagement,

behavioral water efficiency, and data analytics.- - -

04/29/20 Riley WastewaterIndiana American

WaterComprises a wastewater treatment system. $1.5 - -

04/17/20 Viking Supply C.I. ThornburgManufactures pipes, valves, and fittings for water and sewer supply.

- - -

04/06/20 Wigen METAWATER Provides water treatment and purification systems. - - -

04/01/20New Water

Systems

Jack Tyler

EngineeringOffers water and wastewater treatment, distribution, and collection.

- - -

03/30/20 Seven SeasMorgan Stanley

InfrastructureProvides water and wastewater treatment for municipal, industrial, and private clients.

$500.0 - -

03/09/20Leonard

ValveBessemer

Designs and manufactures water temperature control valves and monitoring devices.

- - -

03/09/20Automatic

SystemsVessco

Offers controls and automation for water and wastewater treatment plans in the Upper Midwest.

- - -

02/28/20Infratech Sewer &

Water Services

Environmental 360

Solutions

Provides sewer and pipe inspection, maintenance, and

repair services.- - -

02/06/20 BaswoodCambrian

InnovationDevelops technology-based solutions for wastewater and biosolids treatment.

- - -

01/15/20 Irrisoft Smart Rain Manufactures smart irrigation control products. - - -

Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

6


HISTORIC DEAL & VALUATION TRENDS

PUBLIC COMPANY

YEAR-OVER-YEAR

EBITDA MUTIPLE

EBITDA multiples among public companies have largely outpaced 2019

levels, rebounding strongly from the onset of COVID-19

MERGER &

ACQUISTION

ACTIVITY

Transaction volume and disclosed values have fallen year-over-year in

YTD 2020 although volume has increased in

recent months Nu

mb

er

of

Tra

nsa

cti

on

s

STRATEGIC &

FINANCIAL BUYER

BREAKDOWN

PE has comprised a lower percentage of transactions in YTD 2020 compared to

2018 and 2019, while public and private buyers

have remained constant

Note: Year-to-date (YTD) ended September 1

Source: Capital IQ, FactSet, and Capstone Research

Perc

en

tag

e o

f T

ran

sacti

on

s

Note: Year-to-date (YTD) ended September 1

Source: Capital IQ, FactSet, and Capstone Research

U.S

. D

ollars

in

Millio

ns

En

terp

rise

Valu

e/E

BIT

DA


140

91111

138

217

155

91

$0

$5,000

$10,000

$15,000

$20,000

0

50

100

150

200

250

300

2015 2016 2017 2018 2019 YTD 2019 YTD 2020

Transactions Disclosed Value

50.7% 51.6%40.5% 34.8%

52.5% 46.2%

30.7% 28.6%

27.9%28.3%

19.8% 28.0%

8.6% 6.6%12.6%

11.6%8.8% 7.5%

10.0% 13.2% 18.9% 25.4% 18.9% 16.1%

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 2019 YTD 2020

Private Public PE Platform PE Add-On


14.1x

10.4x8.2x

6.9x

13.7x

17.2x

13.9x10.8x

9.3x 8.6x

14.6x

17.2x

0x

5x

10x

15x

20x

25x

30x

Evoqua Mueller Water Suez Veolia Watts Water Xylem

2019 2020

7

PUBLIC COMPANY TRADING & OPERATING DATA

Price % 52 Wk Market Enterprise LTM EV / LTM

Company 09/08/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA

Evoqua Water Technologies Corp. $19.03 75.4% $2,230.3 $3,041.0 $1,458.1 $225.5 15.5% 2.1x 13.5x

Mueller Water Products, Inc. $10.56 83.1% $1,666.5 $1,971.4 $965.7 $186.3 19.3% 2.0x 10.6x

Suez SA $17.83 94.3% $11,145.5 $27,256.7 $19,723.0 $2,935.7 14.9% 1.4x 9.3x

Veolia Environnement S.A. $23.17 67.5% $12,847.3 $28,103.9 $29,571.0 $3,278.2 11.1% 1.0x 8.6x

Watts Water Technologies, Inc. $96.69 84.5% $3,256.1 $3,371.8 $1,516.3 $230.4 15.2% 2.2x 14.6x

Xylem Inc. $81.35 91.1% $14,639.7 $16,371.7 $4,950.0 $958.0 19.4% 3.3x 17.1x

Mean 15.9% 2.0x 12.3x

Median 15.3% 2.1x 12.0x

Harmonic Mean 15.3% 1.7x 11.5x

EV = enterprise value; LTM = last twelve months

$ in millions, except per share data

NM = Not Meaningful

Last Twelve-Month Margin Performance

Last Twelve Month 1-Year Revenue Growth

Source: Capital IQ as of September 8, 2020

8


31.6% 33.7%

52.5%

14.7%

42.0%38.3%

15.5%19.3%

14.9%11.1%

15.2%19.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%


Gross Margin EBITDA Margin

4.3%

1.1%

-0.6%-1.5%

-4.3%-5.8%

-10.0%

-5.0%

0.0%

5.0%

10.0%


WATER INFRASTRUCTURE REPORT CONTRIBUTORS

Connor McLeod

Research Associate

[email protected] | 617-619-3319

Connor is a Research Associate at Capstone Headwaters primarily specializing in Building Products &Construction Services, Healthcare, Business Services, and Cybersecurity.

Prior to joining Capstone Headwaters, Connor was a specialist with the Investor Services team atBlackRock where he worked with mutual funds, closed end funds, and exchange traded funds andcommunicated fund performance, relevant market dynamics, and facilitated trades for shareholders,financial advisors, and institutional clients. Connor holds a BA in Economics from Bates College and isa Series 7 Registered Securities Representative.

9


Lisa Tolliver

Senior Director


Lisa has 20 years of experience in the investment banking industry, primarily focused on advisingmiddle market private business owners in liquidity related transactions. As a Senior Director inCapstone Headwaters’ Consumer practice, she works closely with clients to advise and executedomestic and cross-border M&A transactions, recapitalizations and capital raises. Lisa has deep M&Aexpertise and knowledge of businesses in the consumer and e-commerce sector, particularly related tothose selling via direct-to-consumer, Amazon, mass and OTC channels.

Prior to Capstone, Lisa worked in the Capital Strategies Group at Morgan Stanley Smith Barney andalso spent 10 years working for the middle market investment banking arm of Citigroup, where shewas involved in the evaluation, marketing and closing of numerous transactions involving privatebusinesses and corporate divestitures. Lisa received her BA on academic scholarship from Illinois StateUniversity and is a Series 7 and 63 Registered Securities Representative.

Ted Polk

Managing Director


Ted is a Managing Director at Capstone Headwaters, based out of Chicago. Previously, Ted was also aManaging Director in Morgan Stanley’s Capital Strategies Group and with Citi Capital Strategies. Hehas over 25 years of transactional experience in various industrial service and product categories.Transactions he has led have been the recipient of multiple industry awards including Cross-BorderMiddle-Market Deal of the Year, Middle-Market M&A Financing Deal of the Year, Middle-Market Dealof the Year, Professional Services Deal of the Year, Corporate M&A Deal of the Year and USARecapitalization Deal of the Year. Previously, Mr. Polk worked at Valuemetrics, Inc. and in theCorporate Banking Group at The Bank of New York. Ted received his BSBA degree from GeorgetownUniversity and MBA from the University of Chicago. He is a Chartered Financial Analyst (CFA), a Series7 and 63 Registered Securities Representative, and a Series 24 Registered Securities Principal.

FIRM TRACK RECORD

Capstone Headwaters maintains active practices in Water and Infrastructure in the middle market, having represented clients

across various specialties including water, roadways, geo-technology, utilities, energy, solar, and communications. This focus

allows Capstone to provide companies with real-time transaction information and immediate access to key decision makers

among the industry’s most active acquirers and investors.

10


has been acquired by has been acquired by has been acquired by

has partnered with has been acquired byhas been acquired by has been acquired by

a portfolio company of

has been recapitalized by

has been acquired by has been acquired by

a portfolio company of

has secured debt and equity financing from

backed by

has been acquired by

CITATIONS

1. Black & Veatch, “Water Report,” https://www.bv.com/reports, accessed September 4, 2020.

2. Xylem, “Quarterly Reports,” https://www.xylem.com/en-us/investors/financial-information/, accessed September 4,

2020.

3. Mueller Water Products, “Mueller Water Products Reports 2020 Third Quarter Results,”

http://ir.muellerwaterproducts.com/press-releases/2020/08-05-2020-221140167, accessed September 3, 2020.

4. Evoqua, “Third Quarter 2020 Earnings,” https://aqua.evoqua.com/events-calendar, accessed September 4, 2020.

5. American Society of Civil Engineers, “Status Report: COVID-19’s Impacts on America’s Infrastructure,”

https://www.infrastructurereportcard.org/wp-content/uploads/2020/06/COVID-19-Infrastructure-Status-Report.pdf,

accessed September 8, 2020.

6. Watts Water Technologies, “Waters Water Technologies Reports Second Quarter 2020 Results,”

https://investors.wattswater.com/press-releases/press-release-details/2020/Watts-Water-Technologies-Reports-

Second-Quarter-2020-Results/, accessed September 2, 2020.

7. Xylem, “Xylem Second Quarter 2020 Results,” https://xyleminc.gcs-web.com/static-files/5123b51d-0435-49cd-a73a-

09705dbac35a, accessed September 1, 2020.

8. Evoqua, “Q3 2020 Evoqua Water Technologies Corp. Earnings Conference Call,”

https://aqua.evoqua.com/event/conference-call/q3-2020-evoqua-water-technologies-corp-earnings-conference-call,


9. United States Census Bureau, “Construction Spending,” https://www.census.gov/construction/c30/c30index.html,


10. International Finance Corporation, “The Impact of COVID-19 on Water and Sanitation,”

https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/infrastructure/resources/the+i

mpact+of+covid-19+on+water+and+sanitation, accessed September 3, 2020.

11. Reuters, “Israel’s Arison sells Miya water firm to Bridgepoint for $260 million, https://www.reuters.com/article/us-miya-

water-bridgepoint-idUSKCN1PM1G7, accessed September 14, 2020.

12. Miya, “Antin Infrastructure Partners to acquire Miya from Bridgepoint,” http://www.miya-water.com/en/news/antin-

infrastructure-partners-to-acquire-miya-from-bridgepoint/, accessed September 14, 2020.

13. Business Wire, “VertexOne Acquires WaterSmart to Expand its SaaS Leadership Position in the Utility Market,”

https://www.businesswire.com/news/home/20200506005191/en/VertexOne-Acquires-WaterSmart-Expand-SaaS-

Leadership-Position, accessed September 3, 2020.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-

tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of

any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of

any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the

general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation orneeds of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all

investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied

upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary

materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject

to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This

report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained

herein should not be construed as legal advice.

11


https://www.bv.com/reports

https://www.xylem.com/en-us/investors/financial-information/

http://ir.muellerwaterproducts.com/press-releases/2020/08-05-2020-221140167

https://aqua.evoqua.com/events-calendar

https://www.infrastructurereportcard.org/wp-content/uploads/2020/06/COVID-19-Infrastructure-Status-Report.pdf

https://investors.wattswater.com/press-releases/press-release-details/2020/Watts-Water-Technologies-Reports-Second-Quarter-2020-Results/

https://xyleminc.gcs-web.com/static-files/5123b51d-0435-49cd-a73a-09705dbac35a

https://aqua.evoqua.com/event/conference-call/q3-2020-evoqua-water-technologies-corp-earnings-conference-call

https://www.census.gov/construction/c30/c30index.html

https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/infrastructure/resources/the+impact+of+covid-19+on+water+and+sanitation

https://www.reuters.com/article/us-miya-water-bridgepoint-idUSKCN1PM1G7

http://www.miya-water.com/en/news/antin-infrastructure-partners-to-acquire-miya-from-bridgepoint/

https://www.businesswire.com/news/home/20200506005191/en/VertexOne-Acquires-WaterSmart-Expand-SaaS-Leadership-Position

INTEGRATED CRISIS MANAGEMENT SOLUTIONS

BUILD REALIZE SUPPORTGROW

As a firm, we have mobilized our collective resources to deliver an integrated solution to business owners navigating through

these times. We can help frame your decisions, access capital to protect your position, and provide specialty transaction

expertise to capture opportunities as they arise.

Our full-service capabilities help companies through every aspect of the business, supported by dedicated industry experts,

market intelligence, and private equity coverage.

Financial Advisory

We specialize in performance

improvement and value creation

in difficult situations.

Board Advisory • Strategic Blueprinting

• Evaluate Capital Adequacy• Performance Tracking

• Management Accountability

• Communication

Operational Effectiveness • Cost Structure Management

• Operational Assessment• Management Assessment

• Sales Augmentation• Organizational Optimization

Crises Management • Turnaround / Interim Mgmt.

• Corporate Restructuring

• Bankruptcy Protection

Capital Access

We help manage through new or

existing lenders or investors and

secure an optimal solution.

Debt Financing• Bridge / Interim Financing

• ABL and Cash Flow Revolvers• 1st and 2nd Lien Term Loans

• Subordinated Debt

• Sale-Leasebacks

Equity Financing • Growth Equity• Secondary Equity Recaps

• Structured Equity• Acquisition Financing

• Investor Management

Alternatives • Creditor Mediation

• DIP and Exit Financing

• Government Support Programs

Mergers & Acquisitions

We can assist opportunist

acquisitions, execute sales, and

navigate distressed transactions.

Strategic Acquisitions• Target Identification

• Valuation & Structure• Buy-Side Due Diligence

• Quality of Earnings

• Buy-Side M&A Execution

Sales & Divestitures• Corporate Valuation• Market Assessment

• Transaction Readiness• Sell-Side M&A Execution

• Asset Divestiture

Distressed Transactions• Business Unit Divestiture

• Distressed M&A• §363 Sale

WE ARE ENGINEERED TO MEET THE FULL LIFECYCLE DEMANDS OF PRIVATE COMPANIES

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TO LEARN MORE ABOUT OUR SERVICES AND SPEAK TO A MEMBER OF OUR TEAM CONTACT US.

https://capstoneheadwaters.com/contact-us-0

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www.capstoneheadwaters.com

Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The

firm has a rich 18+ year history of achieving extraordinary results for middle market entrepreneurs, business owners,

investors, and creditors. The firm offers a fully integrated suite of corporate finance services, including merger & acquisition,

debt & equity placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory

services.

Headquartered in Boston, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. with 16 dedicated

industry groups. Capstone has been recognized consistently as one of the top investment banks to work for and “U.S. Middle

Market Firm of the Year.”

BUILT FOR THE MIDDLE MARKET

UNITED STATES

170+ professionals

17 offices

Boston Boise Burlington Chicago Dallas Denver Greenwich Houston

Los Angeles New York Orange

County Philadelphia San Diego

San Francisco St Louis Tampa

Washington DC

INTERNATIONAL

450+ professionals

60+ offices in 40 countries

Asia: China India Japan Latin America: Argentina Brazil Chile Colombia Mexico Peru

Africa: Congo Egypt Ghana Ivory Coast Mauritius Morocco Senegal South Africa

Europe: Belgium Bosnia Croatia Czech Republic Finland France Germany Herzegovina

Hungary Ireland Italy London Netherlands Norway Poland Russia Serbia Slovenia

Spain Sweden Switzerland Turkey United Kingdom

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