Culligan, a BDT Capital Partners-backed water filtration and treatment services and solutions provider, is in ongoing discussions with bolt-on targets around the globe, said CEO Scott Clawson.

The Rosemont, Illinois-based company, with roughly USD 3bn in annual revenue, is interested in targets across all its segments: water softening, filtration, dispensers, and water treatment, he said.

It is pursuing small acquisitions in the household market as well as those related to resorts, hotels, offices, and warehouses, Clawson said. Most targets Culligan is talking to generate between USD 2m and USD 4m in annual sales, he added.

It is also interested in slightly larger targets with 15 to 20 employees that generate USD 6m or more in annual sales if they can bring Culligan to a new market or build out its presence in a large metropolitan area, he said.

The company typically buys roughly 50 companies a year and could close five to 10 acquisitions in 1Q25, Clawson projected, declining to comment on how advanced potential acquisition talks are with targets.

Most of the targets Culligan pursues have roughly 18% EBITDA margins and, depending on the geographic market or size, these businesses can fetch up to 6x-8x EBITDA, according to Clawson.

Targets should have a strong service employee team in the markets where they operate, he added.

Culligan is focused on growing its footprint in Mexico and other Latin American countries like Brazil, Paraguay, Chile, and Colombia. It also wants to enter Peru and Ecuador in the near term, said the CEO.

A longer-term goal for Culligan is to break into Southeast Asian markets plagued by unsafe water and plastic pollution, such as Vietnam, Malaysia, Thailand, and The Philippines, he said.

A key driver for Culligan has been growing consumer interest in sustainability and maintaining safe, filtered water systems. Roughly 30% of Culligan’s business stems from household water treatment while the remainder comes from commercial segments such as hotels, offices, and well sites, Clawson noted.

It is interested in bulking up its services to concerts, sporting events, and amusement parks, he said.

Culligan has “hundreds” of targets in its pipeline, the CEO said. The company actively scouts for targets and receives inbound approaches from small business owners looking to retire, said Clawson.

In May, Culligan sold its commercial and industrial business to Danish pump manufacturer Grundfos for undisclosed terms. The UK and European-focused unit generated more than EUR 100m in revenue. It was one of the few divestitures in the company’s history, according to Clawson, who noted that industrial processing did not fit Culligan’s consumer services focus.

The company is not considering additional asset sales at this time, he added.

BDT acquired Culligan in May 2021 for undisclosed terms from Centerbridge Partners and Advent International. The latter firm retained a minority stake in the business. Morgan Stanley served as lead financial advisor to Culligan in that deal with Citi assisting. Davis Polk & Wardwell acted as lead counsel to BDT.

The company has more than 14,000 employees and operates in more than 90 locations worldwide.