The Business

Northern Water Works Supply, Inc. (“NWWS”) (www.davies-northern.com) is the Midwest’s largest independent wholesaler of water and wastewater (sewer) products to municipalities, contractors, and public and private water systems in Minnesota, North Dakota, South Dakota, Iowa, western Wisconsin and northern Illinois. With sales in excess of $100 million, NWWS operates from a network of six branches with 115 employees. NWWS distributes a full line of pipe, fittings, valves, water meters, fire hydrants, maintenance and repair products, and other components that are used to transport clean water and wastewater between reservoirs, treatment plants and residential/commercial locations. The products distributed by NWWS are integral to building, repairing and maintaining water and wastewater systems and serve as part of the basic municipal infrastructure required to support population and economic growth.

The Industry

NWWS participates in the U.S. waterworks market, a highly fragmented $11 billion segment of the $170 billion MRO industry. The nation’s waterworks systems are characterized by outdated infrastructure, potential water shortages and pollution. These factors, combined with steady population growth, more stringent environmental regulations and recent legislative activity, are expected to support strong industry growth for the foreseeable future. Ferguson Enterprises, Inc. and The Home Depot, Inc.’s recently acquired subsidiaries – National Waterworks, Inc. and Hughes Supply, Inc. – collectively account for more than 30% of U.S. waterworks industry sales.

The Process

Prestwick Partners initiated this transaction and acted as the exclusive financial advisor to NWWS and its shareholders. Prestwick Partners designed an M&A process, prepared marketing materials, evaluated acquisition proposals and negotiated the transaction with Ferguson Enterprises, Inc. Our process included both strategic acquirers and private equity groups interested in acquiring middle-market businesses.