On Wednesday, it was announced that publicly listed software company Autodesk will acquire “smart water” infrastructure firm, Innovyze, for an enterprise value of $1 billion. The seller is EQT, the Swedish real assets investor that manages EUR 52 billion (around $63 billion) in client assets, which had held Innovyze as part of EQT Private Equity’s Mid Market U.S. fund.
Portland, Oregon-headquartered Innovyze has been a developer of water infrastructure software solutions since 1996. In 2017, under EQT’s ownership, Innovyze merged with XP Solutions, both companies having been separately carved out from other international public engineering companies. Since that time, the combined company has grown to become the world’s largest pure-play water-focused provider of software that works across the infrastructure lifecycle. Today, Innovyze serves 6500 clients across 60 countries, including utilities, wastewater facilities, petrochemical refineries, and food and beverage companies.
In a statement on the acquisition, Autodesk said that owning Innovyze will position Autodesk as a technology leader in end-to-end water infrastructure solutions from design to operations, accelerating Autodesk’s own digital twin strategy, and creating “a clearer path to a more sustainable and digitized water industry.” This strategy will no doubt gain urgency in coming years, with 2 billion people worldwide already lacking access to safe drinking water at home, and more than two-thirds of the world’s population anticipated to be living in water-stressed areas by 2025.
“We can achieve a more sustainable planet, but we can’t do it without responsibly managing our use of water and securing its future,” said Andrew Anagnost, Autodesk president and CEO. “An estimated $1.9 trillion is required to address global water infrastructure needs by 2030, and by fundamentally changing the way systems are designed, constructed, and operated, we are best positioned to overcome this challenge and realize the better world we’ve imagined.”
“Water is our most valuable resource and Innovyze’s product portfolio enables sustainable management of that asset, benefitting our local communities and global ecosystem,” said Sydney Pardey, Director and Investment Advisor to EQT Private Equity, in a comment on the transaction. “It has been exciting to work with the visionary management team, led by [CEO] Colby Manwaring, to transform Innovyze into a global technology leader at the forefront of water software solutions.”
Future-proof
Announcing the transaction on Wednesday, EQT noted that under its stewardship, it supported Innovyze in realigning the sales organization to pivot to an enterprise selling strategy. In recent years, Innovyze’s product offering has evolved to include resource modeling, simulation, and predictive analytics to enable cost-effective and sustainably designed water distribution networks, collection systems, treatment plants, and flood protection capabilities.
EQT said Innovyze was exemplary of a successful EQT investment: transforming a market leader in a thematic sub-sector, with a positive sustainability footprint, into a “future-proofed” platform.
Axius Water
Earlier this month, private equity giant KKR announced that the water quality solutions platform that it launched with XPV Water Partners now has a corporate name: Axius Water.
Axius Water was estimated under KKR’s Global Impact Fund and XPV Water Partners in December 2019 with the foundational acquisitions of Nexom and Environmental Operating Solutions, Inc (EOSi), and the subsequent acquisition of Environmental Dynamics International (EDI) in June 2020. Winnipeg, Manitoba-based Nexom, Pocasset, Massachusetts-based EOSi and Columbia, Missouri-based EDI will continue to trade under their existing names and brands as part of Axius Water’s growing portfolio.
