Global Water Intelligence By Ian Elkins
The water quality solutions platform created in 2019 by KKR and XPV Water Partners was rebranded this month as Axius Water, simultaneous with the appointment of seasoned water veterans Gretchen McClain and Debra Coy as independent board members.
The move reunites McClain with Axius CEO Chris McIntire, who founded Nova Analytics before running Xylem’s analytics and treatment businesses under McClain after she took over as group CEO in 2011.
“We felt that having industry experts with deep connections to how things happen on the ground in water would be a welcome addition to the board room,” McIntire told GWI this month. “As we thought about adding some independent board members, Gretchen and Debra were right at the top of the list, and we were fortunate to be able to get both of them enthusiastic about what we’re doing.”
There is understood to be no conflict between McClain’s role as an operating executive at The Carlyle Group and her board position at KKR-backed Axius Water.
Axius Water’s Branded Water Offering
The three businesses that sit under Axius Water will retain the branding on which they have built their reputations. More acquisitions will follow as the group broadens its international reach.
Fixing the Plumbing
Since joining Axius in July 2020 – shortly after the acquisition of EDI – McIntire has been focused on getting what he calls the “financial plumbing” of the business right, recruiting a new CFO, and preparing for the next wave of M&A activity. His track record of rolling up fragmented markets (first at Nova Analytics, and then at food instrumentation company KPM Analytics) gives him a natural advantage, and he is keen to expand the international reach of the Axius platform.
“We have a pretty robust pipeline of companies that we’re talking to,” he told us. “Today we are a largely North American business. In terms of where I see us going, I expect we will add businesses that have their centre of operations in Western Europe and North America. My experience has been that North American businesses can struggle to project appropriate technologies to Europe, and European companies can likewise struggle to bring technology to North America. Adding companies in Europe to our group will give us that customer intimacy much more quickly.
“We want to build a meaningful group of companies that make sense together in terms of products and geographies. I think about our commercial organisation as a ‘hand’, but when it comes down to it, the ‘fingers’ have to touch the customers. As we look at acquisitions, some of them will make the ‘hand’ a little bigger, and some of them may add another ‘finger’.”
McIntire is unfazed by the suggestion that there are bigger competitors out there with bigger balance sheets to put to work.
“The individuals in our businesses know how to apply technologies in a way that solves customers’ problems better than the next competitor. Our basis of competition really comes down to application and domain expertise, and that ability is not directly tied to scale,” he explained. “Our companies have built their reputations on solving customers’ problems, and those reputations are embodied in their brands.”
Getting Ahead of the Regs
Much of the business conducted by Axius Water’s three portfolio companies is predicated on addressing the regulatory requirements of municipal customers, and for them to remain competitive, they have to stay one step ahead of nutrient legislation.
“Businesses like Nexom, EDI and EOSi all have solutions that can make existing facilities and footprints more effective, particularly when it comes to hitting regulations and discharge requirements. The reality is that nutrients are regulated in a very local way, so staying close to the market and understanding where the regulations are coming from is a key competency of the business,” said McIntire.
“We’re in a good position to get this right and to make sure that we’re able to maximize our acquisitions in a way that we keep those talents alive. I feel like we really have a lot of the right ingredients in place to be able to succeed.”