The acquisition of Mechanical Equipment Company (MECO), an industrial water treatment company, by Denmark-based Grundfos was not just a strategic fit but a cultural one too. Both are third generation family-owned businesses. Continuing the MECO legacy was very important to the family who owned and operated it for 90 years. Grundfos’ pump and water treatment company, while a large business, is still controlled by the founding family and shares a likeminded culture.
A Strategic Fit
MECO designs, engineers and manufactures industrial water purification equipment for various end markets, with the biopharmaceutical sector being its largest. Grundfos, a major player in the global pump market, was working to build a complementary water treatment platform. MECO became the foundation and platform from which to build it.
The additional resources of Grundfos allows MECO to further expand internationally.
The deal, which closed in November, faced a few obstacles. The ongoing pandemic presented challenges for the cross-border transaction. International travel proved difficult and many of the meetings and diligence that would have taken place in person were instead handled virtually.
In addition, MECO, which is headquartered outside of New Orleans, La.,, has a long history of dealing with hurricanes. In 2005, Hurricane Katrina decimated its headquarters and left a large segment of the company’s employees homeless. MECO’s owners rebuilt the business while simultaneously taking care of the displaced employees.
Fast forward to 2021. As the deal was reaching final negotiation points, Hurricane Ida came through Louisiana at the end of August. MECO’s facilities made it through the storm without material damage but the employees were once again displaced by the storm, though none lost their homes. After a brief pause, the deal continued its progression.
For more Deals of the Year coverage, see Mergers and Acquisitions Reveals the 2022 Middle-Market Deals of the Year.