Karl-Michael Millauer

Karl-Michael Millauer did not come up through water the way most of the sector did, because he is, in his own words, "a commercial guy, not a technical guy." He studied law and business administration in Vienna, built a reputation doing IPOs in Austria, and in 2001 joined the BWT Group to turn an engineering business into something a stock market would buy. That mission moved him to Switzerland, where the group's crown jewel, Christ Water, was listed in Zurich, and somewhere in there, as he puts it, he "got infected from water."

Karl-Michael Millauer spent the next two decades running water companies rather than valuing them. He was COO of BWT, CEO of Christ Water Technology, a senior vice president at Aquatech International in Pennsylvania, and from 2013 to 2020 the CEO of Aquarion AG, a Swiss water-treatment group that was built from zero on private-equity money with a clear buy-and-build mandate, and that famously swallowed the 90-year-old German engineering house Hager und Elsasser. So when he talks about water M&A, he is not theorizing, because he has sat on both sides of the table, as the operator being sold and the executive doing the buying.

Karl-Michael Millauer founded KMM Consulting in 2022 to work the part of the market nobody else covers. The big strategy firms chase billion-dollar mandates, but Karl-Michael deliberately fishes at the small end, companies somewhere between a zero-revenue startup and roughly 30 million euros in sales, most of them in the 5-to-15-million range. And the reason that niche exists is almost mechanical: about two-thirds of his sell-side mandates are founders with no successor who simply need to hand the business on, and the other third are healthy companies that have hit a growth ceiling and need a strategic or financial buyer to break through it.

Karl-Michael Millauer has built that practice on an unusual model for the trade, because on the sell-side he does not charge retainers, which is exactly how he ended up carrying 35 mandates at once, since the small owners will not pay a fee for a sale that might never happen, so he only gets paid when a deal closes. The hardest part, he says, is rarely the buyer. It is that founders almost always overvalue their own company, and it can take a year or two of patient conversation before they come down to a number a buyer will actually sign. His rule of thumb is blunt: without a decent slice of recurring revenue, five to six times EBIT is roughly the ceiling, and anything above that usually gets bridged with an earn-out.

Karl-Michael Millauer is also watching a wave of new money discover his corner of the world, and he is not entirely sure it knows what it is buying. Private equity and ESG funds have piled into water on the strength of the megatrend, the water-shortage headlines and the climate story, and as he points out, "very often they do not understand the water business." That gap, between the capital that wants in and the sector knowledge to deploy it well, is a fair description of why a man like Karl-Michael Millauer is suddenly so useful. You can see how I track those water deals and valuations in Leviathan, my own water-sector database.

“I do not go for retainers, which is my way how I could get to this 35 sell-side mandates, because they do not want to pay retainers.”

Karl-Michael Millauer is, in the end, the rare water executive who is just as fluent in a cap table as in a treatment plant, which is precisely why the founders of small water companies keep finding their way to his desk when it is time to sell.