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July 26, 2010
Knoxville-based Aqua-Chem makes second acquisition in 2 years purchase makes foreign markets more accessible, CEO says.

Knoxville News Sentinel, By Bill Brewer

Aqua-Chem Inc., which makes water purfication systems for industry and the military, announced Monday its second acquisition in two years and is looking at additional merger targets.

Knoxville-based Aqua-Chem has acquired Specific Equipment Co. of Houston and will make that company a division, retaining its president and employees.

Terms of the deal were not disclosed, but Aqua-Chem said it will add Specific’s fluid-handling systems for the petroleum, resort hotel and other industries to its brands.

Specific President Phil Shrader will remain with Aqua-Chem and manage the Specific line of products. Shrader said Specific was sold to Aqua-Chem because of the production, sales and service capabilities Aqua-Chem offers.

Aqua-Chem’s president and CEO, David Gensterblum, said the purchase extends his company’s reach to markets outside the United States, like South America and Mexico.

“Of our commercial business, over 60 percent could be exports on non-U.S. revenue over the next three to four years,” Gensterblum said. “With the acquisition of Specific, this is going to help us achieve that goal.”

Gensterblum said Specific’s distribution network in Mexico and South America is key to selling water purification equipment to oil companies exploring for petroleum in those areas. He said customers could include Mexico’s and Brazil’s petroleum operations as well as Chevron, BP, and ExxonMobil.

Equipment companies like those are in the market for desalination gear, oil-water separators, and washdown equipment, according to Gensterblum.

Gensterblum said discussions with Specific about a merger have been going on for a year. He noted the company is a good fit because there isn’t crossover with the customer bases and Specific opens up Aqua-Chem to new markets and products.

He is counting on Specific to contribute revenue the way Matrix has. Aqua-Chem acquired Matrix in October 2008, and Gensterblum said that company “has panned out extremely well for us.”

While Specific employees will join Aqua-Chem, Gensterblum said the company will not be hiring at the Forks of the River Industrial Park plant in East Knox County. He said the plant is under capacity and has room to grow.

The company employs about 200 people at its headquarters operation in Knoxville, Matrix in Fort Lauderdale, Fla., and Specific in Houston, with $65 million to $100 million in annual revenue.

Altus Capital Partners LLC of Westport, Conn., is the largest outside investor in Aqua-Chem. Altus Senior Partner Gregory L. Greenburg said his company’s continued investment in Aqua-Chem demonstrates the commitment Altus has made in helping the manufacturer broaden its industrial products.

Bill Brewer
Business editor