MARKET PUSH. Focus is on industrial treatment work. (Photos courtesy of U.S. Filter Corp.)

Siemens’ nearly $1-billion purchase of most of USF’s water technology and services business, announced last spring, closed in July. The deal marks the end of a topsy-turvy time for the firm, caught up in moves by former owners Vivendi and Veolia into other business areas, including an ill-fated foray into moviemaking. Some observers say USF was affected competitively by the corporate distractions.

SEIDEL

In a Sept. 8 conference call, Seidel said that Veolia kept much of USF’s former municipal privatization business, while selling to Siemens the equipment, treatment and technology units that can serve clients as water demand and regulation both increase. He says Siemens only invests in global businesses and that USF is set to become its "water platform" worldwide.

"Under the French, USF could only participate in North America," says Seidel. "That was a weakness. We were artificially restricted in many markets, particularly in Asia, where it was very painful." USF now hopes to take advantage of crackdowns in levels of arsenic, perchloride, nutrient discharges and disinfection byproducts, and not just in the U.S. "The same thing is occurring in the European Union and even in China," he says.

Seidel believes USF’s new owner is more amenable to investing in new technology such as advanced membranes. "We estimate that new products will generate $100 million in sales in 2004," he says. The new USF, now based in Warrendale, Pa., and known as "USF–a Siemens business," aims to be first or second in its key market sectors. Seidel says Siemens’ industrial experience and client list will boost USF’s own expertise in cost-efficient industrial wastewater treatment and high-purity process water production.

Seidel is impressed with Siemens’ $80-billion revenue last year "and no debt," he says. USF is a $1.2-billion firm. "We now have an owner that understands the business we’re in. It’s a nice cultural fit we didn’t have before."