Axel Johnson Inc. Acquires Kinetico Incorporated
"We believe that acquiring and developing a group of businesses focused on improving access to clean, safe water represents both an attractive long-term investment and the opportunity to make a meaningful social contribution," says Michael D. Milligan, president and chief executive officer of Axel Johnson Inc. "We have been looking for some time for a company that could add dimension and scale to our AxWater Group. In Kinetico, we have found an excellent match — in culture and values as well as long-term vision for the business. We believe the potential for Kinetico is tremendous.
"Kinetico will join Axel Johnson as a stand-alone company; our plans are to maintain and build on Kinetico's operations from its existing campus in Northeast Ohio. We are prepared to support current management as they work to achieve our shared vision for the company, and to offer the entire Kinetico team the opportunity to help shape and build a broader Axel Johnson endeavor across the water industry," Milligan adds.
A statement from William Prior, Founder of Kinetico Incorporated:
"More than 400 of our shareholders, the majority of which are company employees, have voted to sell Kinetico to Antonia Ax:son Johnson of Stockholm, Sweden. We will become part of the Axel Johnson Group - a family collection of enterprises, launched in 1873 by her great-grandfather, Axel Johnson, and of which she is presently chairman and total owner.More formally, Kinetico will be purchased by Axel Johnson Inc., a legally and financially independent entity within the Sweden-based, Axel Johnson Group. It was established in 1920 for their North American holdings, and currently has primary interests in the energy and environmental sectors.
Just for some perspective on size, Axel Johnson Inc. has revenues of about $3.6 billion. The total Axel Johnson Group has revenues of approximately $8.5 billion and employs more than 15,000 people.
Axel Johnson is indeed a unique enterprise – with long-term holdings in a few companies that offer the potential to earn attractive returns on their owner's capital, make a positive contribution to society, and reflect the values of Antonia and her family. Mike Milligan approached us before Kinetico began to contact possible bidders. In part they were attracted to Kinetico because they felt strongly about the importance of clean, safe water to the communities in which we all live. But also, and perhaps just as importantly, was that Kinetico built such a wonderful reputation for integrity, quality and respect for others.
Finding a buyer that fits our unique culture was indeed a long process. The people of Kinetico are excited that this absolutely unique acquisition will provide broad support for our dreams and strategy to grow from our existing platform. At the same time it will respect our hard won culture, and retain the entire Kinetico organization as it exists. The modern merger and acquisition world is frequently characterized either by transactions made for the purpose of holding a company for several years and then reselling it for huge profits, or by strategic acquisitions made by large public companies to supplement businesses they are already in. In either case the result often is that the original management, identity, culture and facilities become lost at the expense of quarterly profits.
In this environment we are extremely honored to be invited to join the Axel Johnson Group. The owner, Antonia Ax:son Johnson, is a private buyer with a passion to own, operate and grow wonderful businesses long term. Beyond attractive earnings potential, she is concerned with owning and building organizations that reflect her and her family's values. And ensuring the availability of clean safe drinking water to people around the world, with the acquisition of Kinetico, certainly fits the bill. We are thrilled."
SOURCE: Kinetico Incorporated