Evoqua water filter maker of Warrendale finds clearer focus
Ron Keating appreciates a business that caters to a basic need.
It what drew him to take the top job at Evoqua Water Technologies, which makes water purification equipment.
“Water. Think about the need,” Keating said at the company Warrendale headquarters. “Really, there it is in everything that we touch, every single day.”
Its customers include municipal water plants, manufacturers, power companies and pharmaceutical firms that require ultra pure water for the products they make.
Three years ago as a division of Siemens, it was top heavy and slow to move, and it had a souring reputation because of poor customer service, analysts say. But Evoqua has had a remarkable transformation since being purchased by New York private equity firm AEA Investors in 2014. It is growing sales not only by offering improved products, but by selling services the technical expertise around setting up, maintaining and operating water purification systems.
Evoqua is now about “taking the worry out of water” for customers, Keating said.
AEA took over an operation that was collapsing under its own weight. Filter Corp., from a modest sized wastewater treatment company to a global behemoth that sold for $8 billion in 1999 to Vivendi SA of France.
Vivendi sold part of the business to Siemens in 2004, and both companies struggled to manage an operation that had become a “super nova that was stitched together with literally hundreds of water companies,” said Christopher Gasson, publisher and water industry analyst at Global Water Intelligence.
AEA has given the company focus, Gasson said.
“They have taken on the carcass of a dying mammoth and created something that is a fast moving, exciting water technology company that is actually going places,” Gasson said.
Keating knew nothing about water purification when he was hired as CEO in December 2014. He built his career at industrial companies, including seven years at Downtown based tool maker Kennametal. But he learned to focus on market opportunities by figuring out what was most important to a company customers. And he reshaped Evoqua culture around that principle.
“You really had an organization that didn have a clear direction, didn have a clear purpose, mission,
vision, values and goals that they were going after to accomplish because they had been reorganized so many times,” Keating said. “We had fantastic people, great team members, they just really needed to be enabled.”
Keating stripped out the bureaucracy. Before, the company had 22 departments reporting directly to the CEO. Now there are 10. He got rid of redundant office functions and used the savings to hire more sales and service staff.
Revenue has grown $200 million since Keating was hired to run the company.
Customers and staff have noticed.
Two weeks ago, one customer agreed to go forward on a deal, and three business days later, they were executing a contract, said Tony Purcell, who oversees 130 sales staff in the Eastern United States. The same situation would have taken four months under the prior regime.
“Now we staffed properly to be able to react quickly,” Purcell said.
Duke uses Evoqua technology to clean the slurry from coal ash ponds at its power plants. Evoqua offered better pricing than competitors, Johnson said, and he has also been impressed with the service and attention he has received.
After a system is installed, a high level Evoqua executive visits the site with inspectors to make sure everything is properly installed before it gets turned on, Johnson said.
“No one else I worked with does that,” Johnson said. “That shows me how much our business means to them.”
Evoqua expertise helped crop nutrient producer Mosaic become more efficient operationally, offering value beyond a functional piece of equipment, said Bo Davis, senior vice president of phosphate operations at the company.
“We really have gotten great suggestions from them on how to reduce our costs,” Davis said.
Selling ancillary services is where Keating believes the biggest growth opportunities lie. He doesn just want to sell water meters, filters and treatment plants. He wants to sell an entire product and service package.
“We taking the worry out of water for them,” he said. “We don want to sell tanks. We want to sell water.”