Underground Solutions Inc. Closes $45 Million Deal to Expand Process Solution Division

Underground Solutions Inc. (UGSI), a leader in water and wastewater infrastructure technologies, recently announced that it successfully closed a $45 million financing transaction with Riverwood Capital of Menlo Park, Calif., to expand its Process Solutions division.
The structured transaction is initiated by a $30 million Series C preferred stock financing and has an option for more than $15 million in additional capital. The financing represents one of the largest private equity transactions in the water technology space in recent years.

The transaction proceeds will be used to fund growth on the Process Solutions side of the UGSI business. In 2012, UGSI acquired the Wallace & Tiernan chemical feed assets – composed of the iconic PolyBlend, Encore and Varea‐meter brands, among others – from Siemens Industry Inc. and managed the successful turnaround of that business in 2013.

“While our core Fusible PVC pipe infrastructure business continues to grow profitably at rates of 20 to 40 percent and is approaching 10,000 installations, it requires very little capital to achieve that growth. On the other hand, our UGSI Chemical Feed business would benefit from greater scale, as well as a more comprehensive product line to build on the double‐digit organic growth rate it has enjoyed over the past year. Based on management’s 25 years of experience in running water businesses, most notably USFilter, we see a historic opportunity for acquisitive growth to better position the company in both industrial and municipal markets,” said Underground Solutions CEO Andy Seidel.

Riverwood Capital founding partner Jeff Parks said, “We’re excited to partner with the leading management team in the water industry. Their recent success in both the underground infrastructure market with Fusible PVC pipe and with the quick turnaround of the former Siemens assets is impressive and we want to help them build on that platform.”

The transaction closed on June 6. Parks and Riverwood Capital principal Sean McArthur,  who is also a former M&A specialist at Citigroup Global Markets, will both join the UGSI board of directors.
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