Culligan: a thirst for growth

A refreshing prospect

Rising populations, health concerns, and increased scarcity have transformed the consumer water business into a rapidly growing USD $42 billion global market. It’s an exciting space for us, sitting squarely at the intersection of two of our core sectors – consumer and industrials – and we’ve been tracking it closely for more than a decade. It’s also a space with a sustainability story at its core. By creating filtered water solutions for homes and businesses, it not only provides cleaner, safer water for consumers but also eliminates the need for single use plastic bottles.

Culligan had been on our radar for some time. It was a leading consumer brand in the US that had drifted strategically under the ownership of a succession of conglomerates. While many saw a low-growth business with a jumble of disconnected products, we saw the opportunity to acquire a solid platform on which to build a champion in the provision of safe, clean water to homes and businesses. Aligning behind a clear plan and providing the financial and operational resources to drive transformative growth is central to the way we operate at Advent. It’s an operationally and resource intensive model, but we’ve never shied away from complexity in our pursuit of building better businesses.

It also had an exceptional CEO in Scott Clawson. From our first meetings, we had firm conviction that Clawson had the ability to move at pace and build a global leader, once provided with the necessary resources and support to implement a growth strategy.

Putting in the plumbing for global growth

Working in partnership with Clawson and his team, we developed a value creation plan to transform Culligan. This comprised three core elements: a revised strategic plan to expand into the bottled water business and service area, an ambitious global acquisition strategy, and a plan for internal transformation under an augmented management team.

On the M&A side, we identified 18 key markets globally, and then partnered with Advent investment professionals in Brazil, China, Germany, India, and the UK to systematically identify potential acquisition targets. In conjunction with management, we built a dedicated in-house acquisition team, Culligan Global Water Intelligence, which was given a very clear mandate: find the top players in premium filtered water in each of our identified markets.

The team then spent the next two years building a detailed picture of market dynamics in each of our chosen countries and pursuing select acquisition targets. During our initial investment period, more than 110 companies were acquired and successfully integrated – adding over $1 billion in sales to the business.

Our M&A strategy wasn’t just about buying market share in key territories. It was predicated on taking the best ideas, brands, and technology from each market and offering it to consumers across the global platform. Continued innovation and internal product development were also priorities, with significant investment in research & development (R&D) to maintain the company’s technological leadership.

Adding to the team

At the same time, we worked with Clawson to build upon the company’s already strong management bench, to manage this ambitious global expansion. During 2017 and 2018, the company created and filled several new roles to enable long-term growth and scale, including leadership roles in finance, IT, marketing, product development, and R&D.

Al Hamood, a tenured veteran with over 10 years of operating and leadership experience, who had held several Chief Experience Officer and director roles with Advent portfolio companies, transitioned from his role on the Culligan Board of Directors to serve as President and Chief Finance and Administrative Officer in 2019, working with Clawson to drive and manage a very ambitious growth agenda.

Major operational initiatives included building a digital marketing team from scratch, executing a US marketing campaign to target a new generation of consumers, and developing a global back-office to ensure Culligan could fully integrate its significant number of global M&A deals.

Raising a glass to future success

Since the beginning of our partnership with Culligan, we viewed it as an opportunity to make a real splash in the sector. We put the full resources of our global platform at the company’s disposal to help turn this vision into a reality.

100+ acquisitions

The Advent global network helped the company make transformative acquisitions in key high-growth markets such as Brazil and China, and enabled it to expand rapidly into more developed European markets. The product portfolio now includes more than 35 brands in over 90 countries, including leading global names such as Quench, Vero, Zero Water, and Zip Water. The platform that we’ve helped to create enables Culligan to offer this unrivaled portfolio of products to a worldwide customer base.

Having completed the initial and most intensive phase of our value creation plan, in August 2021 we sold a majority stake in the business to BDT Capital Partners while maintaining a minority stake. Since then, the business has continued on the growth path that we helped establish, making a further 100+ acquisitions, including Waterlogic, a global leader in purified drinking water dispensers. We’re proud of the company’s ability to independently execute the growth plan with far less support from external stakeholders. We always wanted to build a long-term sustainable growth engine, and we’re excited to continue the partnership.