And here is the part that makes this more than a nice growth story: under private equity ownership, the buying has not stopped. So how does a mid-cap company actually out-buy the giants, and what happens when someone bigger buys you? Guillaume Clairet, H2O Innovation’s COO, walked me through the whole machine on the podcast, and I ran his claims against my own M&A database. They check out, and then some.

H2O Innovation: three pillars, one new owner

Founded in 2000 in Quebec City, H2O Innovation runs three pillars: water treatment systems, specialty chemicals and consumables, and operation & maintenance services. In December 2023, the private equity firm Ember Infrastructure took the company private at C$4.25 per share, a premium of roughly 68%, ending more than two decades on public markets.

Now, “take-private” is one of those finance terms that sounds more dramatic than it is: a buyer purchases all the publicly traded shares, the stock gets delisted, and the company keeps operating with one owner instead of thousands. What it changes is the clock speed. A public board answers to quarterly earnings, and a PE owner answers to a five-to-ten-year plan. And if you wonder why a fund came knocking in the first place, Guillaume’s answer is refreshingly unstrategic: they met the way everyone meets in this industry.

Rare asset is not him bragging, by the way. A $200 to $300 million water company sits in a strangely empty part of the market, as he puts it: “there’s really big ones and then the tiny ones.” I found that empty middle fascinating enough to once dig out the yearly revenues of 2,587 water companies and map it myself I Investigated 2587 Water Companies, and if you would rather not miss the next edition, subscribing costs you exactly one click subscribe. That scarcity is also what put H2O Innovation on the radar of private equity funds hunting in water.

How many companies has H2O Innovation acquired?

As you know, I’m fun at parties, so I’ve taken down every M&A move that closed in the water sector since the year 2000 and turned it into a section of my Leviathan database. So when Guillaume started counting acquisitions on the podcast, I checked (to get additional clarity, you understand) and found 19 water-sector acquisitions between 2002 and 2026, with US$99.2 million in disclosed consideration across the 16 deals that have a published price (and a few more that were never disclosed). I verified that count the hard way, deduplicating overlapping records deal by deal, so when I say 19, it is 19. The company itself says about 20, and both numbers are right.

The maple-factory origin story

Because here is the origin story, and I promise it is worth the detour: the very first thing H2O Innovation ever bought was a factory in Victoriaville that built small reverse osmosis systems for maple syrup producers. The young membrane company needed a place to manufacture, the factory had the welders, the automation, the control panel shop, and from one day to the next, a university project could ship water treatment systems. The maple business came along in the deal, and it never left. So when Guillaume counts “soon to be at 20 acquisitions” on the podcast, he is counting from the maple factory; my 19 counts the water-sector deals that followed. And yes, a water company still sells maple equipment, because it kept growing, and nobody walks away from growth out of thematic purity.

That sounds like a lot of buying, so let us put a yardstick on it: US$99.2 million across 16 priced deals is an average of about US$6 million per acquisition. Many single funding rounds in water tech’s venture market are bigger than that. The playbook was never about writing big checks.

What is a sole-source deal, and why does H2O Innovation love them?

A sole-source deal is an acquisition negotiated directly between buyer and seller, with no auction, no bidding war, and no investment bank running a structured process. Of H2O Innovation’s 19 verified acquisitions, exactly one shows a documented competitive process in my records; 14 are evidenced or structurally bilateral, meaning negotiated directly with the seller, and 9 of the 19 used earn-outs.

I will let Guillaume describe the machine himself, because this is the single most quotable minute of the episode.

If you come from tech investing, this is the off-market deal, the pre-empted round, the house bought before the listing went up. And my database says the rhetoric is real: the one banker-run exception was Genesys in 2019, which happens to be one of the largest deals on the list at US$21.7 million. Everything else with evidence was a founder conversation. The earn-out, where part of the price is paid later based on how the business performs, shows up in about half the deals, and that is exactly the structure you would expect when two parties price a company over coffee instead of through an auction. There is even an internal machine for it: an H2O M&A funnel with a senior VP of M&A, separate from Ember’s own funnel.

Is H2O Innovation a roll-up?

Short answer: closer to platform building than to a classic roll-up. A roll-up strategy buys many companies in the same segment to merge them into one bigger entity, often betting that the combined business trades at a higher valuation multiple than the parts. The playbook field in my database reads differently for these 19 deals: 9 add-ons, 6 strategic acquisitions, 2 platform builds, 2 unrecorded.

The distinction matters because pure roll-ups have a rough history, in water as anywhere else. My favorite cautionary tale runs through this exact industry: in 1990, Dick Heckmann bought a struggling little outfit called American Toxxic for US$1.6 million, built it into US Filter through roughly 260 acquisitions, and sold the whole thing to Vivendi for US$6.2 billion in 1999. The asset then lost most of its value, changed hands twice, resurfaced as Evoqua, and in 2023 merged into Xylem at a US$7.5 billion valuation, which works out to more than 4,000 times Heckmann’s starting ticket. Serial acquisition built that company and nearly destroyed it twice. As Reinhard Hübner, who built a $1 billion water revenue company from scratch, put it on the podcast, “the industry is indeed consolidating and it has had consolidation runs before,” and US Filter is the example everyone names. (Reinhard’s SKion Water has since received its own deep dive: 32 quiet deals and one $1.8 billion exit.) H2O Innovation is, at its core, a membrane company.

What separates H2O Innovation from that history is pace and digestion. “We take our time. We take time to integrate,” Guillaume says, and the integration philosophy is deliberately soft: keep the people, keep the channel partners, keep respected brands like Piedmont alive rather than killing them for a tidy logo slide.

How do water companies grow when organic growth is slow?

Water demand compounds faster than water revenue. The editorial line I keep coming back to is that revenue in this sector grows linearly while need grows exponentially, and that structural mismatch is something tariff increases alone cannot close. So a water company that wants to grow fast has exactly two lanes, and H2O Innovation’s answer is to drive in both at once.

And the supply side of this market quietly cooperates. Strategic giants tell small water companies to come back when they are bigger; Karl Michael Millauer, the M&A consultant with 35 water companies on his sell list, says founders hear exactly that, then spend a year or two discovering their real valuation. Which means a disciplined mid-cap with a reputation for closing, for keeping teams, and for paying fairly through earn-outs gets first call on targets the giants never see. The pipeline advantage compounds the same way the revenue does.

What happens when the acquirer gets acquired?

Going private did not stop the machine, and that is the cleanest evidence that the playbook is the asset. Under Ember Infrastructure, H2O Innovation bought NextEra Distributed Water in 2024, Lama Sistemas de Filtrados in September 2025, announced as its 20th deal in 25 years, and in May 2026 announced the acquisition of bestUV, a Dutch UV specialist that founds a whole new disinfection business unit.

In PE language, H2O Innovation is now a platform, the anchor company a fund builds on through further add-ons (a move I dissected in my newsletter on the three PE strategies reshaping water tech, with Ember and H2O Innovation as exhibit one). Ask Guillaume what changed in the deal flow and the answer is, charmingly, not much:

The owner changed, the funnel stayed. Ember bought a company whose product, in a very real sense, is the ability to buy companies well. As Guillaume puts it: “That’s one of the reasons why they were interested in us in the first place.” For the funds watching the water sector, that is the lesson worth stealing: in water, the durable moat was never one technology. It was the relationships that let you buy the next one over coffee.

FAQ: H2O Innovation and the acquisition playbook

Who owns H2O Innovation?

Ember Infrastructure, a New York private equity firm, has owned a majority of H2O Innovation since December 2023. Investissement Québec and CDPQ (Québec’s two big public investment funds) rolled their shares over alongside the management team; together they retain roughly 21%.

How many companies has H2O Innovation acquired?

My Leviathan database verifies 19 water-sector acquisitions between 2002 and 2026, totaling US$99.2 million in disclosed consideration across 16 priced deals. The company counts about 20, which includes the founding purchase of the Victoriaville factory that started the business.

Is H2O Innovation publicly traded?

Not anymore. The company traded in Toronto (latterly as TSX: HEO) until December 2023, when Ember Infrastructure’s take-private at C$4.25 per share closed and the shares were delisted from all exchanges.

What is a sole-source deal?

A sole-source deal is an acquisition negotiated directly between one buyer and one seller, without an auction or a bank-run sale process. Only 1 of H2O Innovation’s 19 verified acquisitions shows a documented competitive process; the rest of the evidenced deals were sourced through direct relationships.

What is due diligence in mergers and acquisitions?

Due diligence is the structured verification a buyer performs before closing: finances, contracts, customers, liabilities, people. Guillaume Clairet’s version is more human: sole-source conversations leave room for the tough conversations about fit and synergies that a tightly run auction process tends to squeeze out.

What are acquisitions in business?

An acquisition is one company purchasing another, either its shares or its assets. Buyers distinguish bolt-ons and tuck-ins (small additions to an existing platform) from strategic or platform acquisitions that open a new market or business line. H2O Innovation’s verified mix: 9 bolt-ons, 6 strategic, 2 platform builds.

Guillaume has lived the startup years, the TSX listing, the take-private, and now the platform era, which is exactly why his read on the next milestone carries weight: the stated ambition is a billion-dollar water company by the end of the decade, and after walking through 19 verified deals, I genuinely cannot tell you whether that number is ambition or just math. Listen to the full conversation with Guillaume Clairet on the (don’t) Waste Water podcast, and tell me in the comments which water mid-cap you think gets bought next.

Sources

1. Leviathan, the (don’t) Waste Water water M&A database, verified 2026-06-09/10: 19 acquisitions, US$99,238,486 disclosed across 16 priced deals; process classification 1 banked / 14 bilateral / 4 undocumented; earn-outs 9 of 19; playbook mix 9 add-ons / 6 strategic / 2 platform / 2 unrecorded.
2. Podcast quotes: (don’t) Waste Water S13E20, Guillaume Clairet, COO, H2O Innovation; Reinhard Hübner and Karl Michael Millauer episodes, via Leviathan, the (don’t) Waste Water water M&A database, verified 2026-06-09/10.
3. Business Wire, “H2O Innovation Signs Definitive Agreement to Be Acquired by Ember Alongside IQ, CDPQ and Management” (October 3, 2023), businesswire.com, and “Ember Completes Take Private of H2O Innovation” (December 7, 2023), businesswire.com, retrieved 2026-06-10.
4. Business Wire, “H2O Innovation Acquires Lama to Expand Global Filtration Solutions” (September 22, 2025), businesswire.com, retrieved 2026-06-10.
5. bestUV acquisition announcement, bestuv.com, retrieved 2026-06-09.
6. A Simple Model, “Acquisition Ace: Dick Heckmann,” asimplemodel.com, and Xylem, “Xylem To Acquire Evoqua in $7.5 Billion All-Stock Transaction” (January 23, 2023), xylem.com, both retrieved 2026-06-10.

The post H2O Innovation: Inside a 19-Deal Water M&A Playbook appeared first on (don't) Waste Water.