Waterco Ltd buys Davey Water Products for $65 million
Global water treatment and pool equipment manufacturer Waterco Limited has announced its acquisition of Davey Water Products, cementing its position as the largest Australian-owned and operated entity in the water industry.
Davey Water Products is a subsidiary of GUD Holdings Limited. The transaction is expected to be completed on September 1, 2023, with a sale price of $64.9 million.
With a combined 131-year history in the multi-billion-dollar global water industry, the acquisition enables Waterco to expand its reach while providing increased market presence and growth opportunities for shareholders.
Waterco founder, executive chairman and chief executive officer, Soon Sinn Goh says the acquisition aligns with Waterco’s long-term strategic vision of becoming a global leader in the water technology industry.
“It positions the company for sustainable growth and enables it to take advantage of emerging opportunities in the market,” he says.
The acquisition brings together complementary strengths and capabilities that will benefit Waterco’s customers across various sectors.
“One outcome of the acquisition will be increased share of global water markets across pool and spa, water transfer and water treatment categories,” Goh says.
Growth opportunities include leveraging geographical strengths across developing markets in Europe, USA, Africa and the Middle East.
“Waterco’s extensive distribution into North America and the European Union will further enhance Davey’s pre-existing reach in Europe,” he says. “Another benefit is that both companies will have access to each other’s customer bases as products are complementary.”
Strategic benefits of the acquisition
Increased research and development capabilities: The combined expertise of both companies in research and development will accelerate innovation and foster the development of premium differentiated products. Davey has a large team in Australia involved in engineering and product development with a strong focus on water scarcity, energy efficiency, and smart connected products.
Local manufacturing advantage: The acquisition of Davey brings the added benefit of local manufacturing, reducing Waterco’s sole dependence on its manufacturing operations in Malaysia and improving supply chain resilience. Davey has a manufacturing plant based in Scoresby, Victoria, covering 2700sqm production space and a 4700sqm raw materials warehouse.
Enhanced brand reputation: Established in 1934, Davey is a well-respected, iconic brand in the Australia and New Zealand markets and will help boost Waterco’s global brand reputation in existing and new markets.
Access to new technologies and intellectual property:Davey possesses unique patents, proprietary technologies, and intellectual property that can be leveraged by Waterco to strengthen its product offerings and gain a competitive edge.
Financial strength: Waterco has minimal or zero debt before acquiring Davey. Despite the borrowings associated with the acquisition, the debt level remains at a low gearing level, indicating strong financial health. The projected combined revenue for FY24 will surpass $200 million, making Waterco the largest Australian-owned manufacturer of water transfer and water treatment products.
Aligned long-term strategic vision: The acquisition aligns with Waterco’s long-term strategic vision of becoming a global leader in the water technology industry. It positions the company for sustainable growth and enables it to take advantage of emerging opportunities in the market.
“Overall, the acquisition of Davey Water Products offers a range of strategic benefits that can help Waterco consolidate its position as a market leader and create value for its stakeholders, including employees, customers, and shareholders,” says Goh.
From PVC pipe distributor to manufacturing and technological powerhouse
Waterco, established in 1981 with a single pool pump store in Sydney, Australia, has since become a global brand recognised for designing and manufacturing filtration and sanitisation innovations for the swimming pool, spa, aquaculture, and water purification sectors.
In 1983, Waterco founded Swimart, a successful swimming pool and spa retail franchise network — one of Australasia’s biggest and oldest — which boasts 75 stores and a fleet of over 220 mobile service vans across Australia and New Zealand.
The company was listed on the Australian Securities Exchange in 1989 (ASX:WAT) and has since evolved into a technological and manufacturing powerhouse that makes products more energy and water efficient, and easier to maintain.
