Heavy industry group Rexnord LLC announced its third acquisition of a water-engineering company in as many years, becoming the latest Milwaukee-area company to expand in the water-technology sector.
"We wanted to add an additional platform that would allow for additional growth of the company," both nationally and globally, Rexnord Chief Financial Officer Todd Adams said Monday.
The privately held company, which includes the Falk subsidiary that makes industrial-sized gears in Milwaukee's Menomonee Valley, will acquire Fontaine-Alliance Inc., based in Quebec, Canada, for $24 million. Fontaine manufactures sluice gates and engineered flow-control systems for municipal water treatment markets. Fontaine employs 185 employees with annual sales of $32 million.
Milwaukee's civic and business leaders are in the early stages of branding the region as a hub of water technology. Southeastern Wisconsin has scores of water engineering companies, including subsidiaries of five of the world's six biggest water-technology companies. The University of Wisconsin-Milwaukee is launching a water-based graduate school and research program, while the Milwaukee 7 economic-development group is creating an industry trade group, tentatively called the Water Council, to promote the region's cluster of water-driven industries as an emerging economic growth sector.
Rexnord sees "good, long-term growth fundamentals" in the water businesses, echoing economists who point to growing international demand for systems that clean, conserve, recycle and desalinate water.
"The long-term requirements for clean water and water conservation drive reasonable economics globally," Adams said.
The company sees the potential for further future acquisitions in water technology as well as "organic growth," he said.
Rexnord traces its history back over a century and has its roots in transmissions, bearings, gears, brakes and aerospace gear. The traditional operations account for $1.3 billion of the group's $1.9 billion in annual sales, it said.
Rexnord, which is majority owned by a private equity firm, made its first foray into water with the 2007 acquisition of Pennsylvania-based Zurn Industries, a maker of industrial water valves and flow controls. Twelve months ago, Rexnord acquired GA Industries Inc., also in Pennsylvania, which also makes valves, sensors and controls. None of the three Rexnord water divisions have production in Milwaukee.
The triad of water companies has become Rexnord's Water Management division, with about $600 million in annual sales, not counting the latest acquisition, Adams said.