FYI--pls note the reference to UGSI toward the end
Evoqua and former Siemens Water Technologies
CEO Lukas Loeffler has been
replaced by Gary Cappeline, who is an
operating partner at Evoqua’s new owner
AEA. Loeffler apparently flunked a presentation
to the board at a meeting in Colorado
earlier this month, and the rest of the board
lost confidence in him. He had never been
expected to last long. Siemens had told him
that he would be transferred with the business
after the sale. This gave him a strong
incentive to secure his future by over-promising
on the results that could be delivered
to AEA after the sale had gone through.
Cappeline, who has spent much of
his career in the chemicals industry, rising
to be COO of Ashland, will be acting
CEO while a permanent chief executive is
sought. He introduced himself to staff in
a ‘town hall’ teleconference on 14 March,
outlining his plans for the organisation.
He listed four main areas of improvement:
increasing the speed at which the business
functions, redistributing power in
the organisation from the centre to the segment
and function leaders, breaking down
the silos within the business to ensure the
company faces the world as a single team,
and delivering increasing customer value.
Helping Cappeline to turn around
the business is management consultancy
Bain, which is undertaking a project to
improve process efficiency and organisational
design; and Argo, a management
consultancy specialising in turning around
struggling businesses, which is helping to
address the problems at Memcor. “As a percentage
of its revenues, it is losing a lot of
money,” Cappeline admitted on the call.
AEA’s next challenge is to find a new
CEO. The simplest solution would be to
sign up former USFilter CEO Andy Seidel.
He had hoped to be parachuted in by one
of the other private equity investors bidding
for the business, but was unwilling to
sanction a bid as high as the €640 million
offered by AEA (with Loeffler’s support).
Although Seidel is perhaps the only person
who could turn Evoqua round in the time
available, one gets the feeling that AEA will
look elsewhere.
Seidel’s own business, Underground
Solutions, had a good year last year. Revenues
were up 14%, driven largely by the
ChemFeed business it acquired from Siemens
Water in 2012, and the company
ended 2013 with a backlog 26% higher
than in the prior year. Despite bad winter
weather in North America hampering construction
activity, UGSI remains profitable,
and is looking for a fourth straight year of
double-digit topline growth in 2014.
AI
