Evoqua Water ( NYSE: AQUA ) +13.8% pre-market Monday after Xylem ( NYSE: XYL ) agreed to acquire the company in an all-stock deal that reflects an implied enterprise value of ~$7.5B.
The two companies generated more than $7B in combined revenue in the 12-months ended September 30, 2022, with $1.2B in adjusted EBITDA; they said the combination will unlock new growth opportunities and should deliver $140M in run-rate cost synergies within three years.
The combined company will be led by Xylem ( XYL ) President and CEO Patrick Decker, and two current members of the Evoqua ( AQUA ) board will join Xylem’s board.
Evoqua ( AQUA ) shareholders will receive 0.480 shares of Xylem ( XYL ) for each Evoqua share, representing a value of $52.89/share, or a 29% premium based on closing prices as of January 20.
Upon closing, Xylem ( XYL ) shareholders will own ~75% and Evoqua ( AQUA ) shareholders will own ~25% of the combined company on a fully diluted basis.
Xylem ( XYL ) has shown good revenue growth but is overvalued, Prasanna Rajagopal writes in an analysis published on Seeking Alpha .
For further details see:
Xylem to buy Evoqua Water for $52.89/share in all-stock deal