Mcilvaine Insights

No. 203   July 7, 2022

Betty Tessien

·       Latest NO64 Market Developments

·       Acquisition and Expansion Guide in Air, Water, and Energy

Latest NO64 Market Developments

Mcilvaine is making forecasts relative to what has been termed air, water, and energy markets.  However, we now have a more precise definition.  It is all the products covered in Mcilvaine report NO64 as explained in the next article.

During the last week this market has been impacted by energy developments

·       The price of oil has dropped and raised concerns about a recession

·       Europe is bracing for a winter without Russian energy by extending the life of coal plants and placing some gas and nuclear plants in the acceptable taxonomy category

·       Bioenergy with CCS has critics but has lots of backing now

The price of West Texas Intermediate crude, the U.S. benchmark, dropped 8% Tuesday to $99.50 per barrel and settled at $98.53 Wednesday. That’s down from March 8th's closing price of $123.70 per gallon.

Brent Crude, the world benchmark, dipped below $100 per barrel for the first time since April before settling at $100.69 Wednesday.

The European Union voted to keep some specific uses of natural gas and nuclear energy in its taxonomy of sustainable sources of energy.

Bioenergy with carbon sequestration continues to be a significant technology for the next 40 years. Since it is carbon negative it may be employed for a much longer time.

The UK is relying on BECCS but has received criticism due to the supply fragility and cost. Since the UK must rely on wood pellets from the U.S. opponents say it is a dangerous situation.  On the other hand, the UK is not reliant on Russian gas which is much more risky.

The cost of BECCS is being compared to electricity from a new nuclear plant. In many locations solar and wind are cheaper. However, wind, solar and nuclear are not carbon negative. If you want to offset other CO2 sources or even reduce the ambient CO2 you need a carbon negative technology.  BECCS is the only game in town.  Direct separation is much more expensive and is not commercially proven.

Acquisition and Expansion Guide in Air, Water, and Energy

Multi divisional companies and private equity firms are looking for the next best fit. It may be in the $500 billion market involving movement, measurement and treatment of air, gases, water, and liquids.

This best fit for higher revenues and profits can be the result of synergistic products and or knowledge.

For example, Ametek last year purchased Magnetrol who is a market leader in level control for tough applications in pollution control and process separation. The fit for a major instrument company such as Ametek is obvious. But what about a system supplier such as Andritz who is expanding their Metris Digital Solutions? Is it a question of synergistic products or synergistic processes? What about a private equity firm who may have synergistic companies in its portfolio or is interested in a standalone acquisition?

McIlvaine analyzes the markets, competitors, processes and acquisitions in dozens of segments of this market. But these individual services are designed to answer the question of whether a specific target company is a great fit.

NO64 Air/Gas/Water/Fluid Treatment and Control: World Markets answers a more basic question which is what company or class of companies deserve attention.

This service can be combined as part of package. NO 64 is Step1. A focused report is Step 2. Step 3 can be follow-on consulting.

Here is what you get with NO 64 versus the focused reports.

The report includes the following subjects.

The June 2022 newsletter is shown at http://www.mcilvainecompany.com/sample/AWE_529/AWE_June_2022.htm

The acquisition directory rates the synergy. If all the products are in the NO64 scope a score of 100 is assigned. The synergy with other N0 64 products is also rated with a potential from 0-100. So, a perfect score is 200.

The directory additions for June show a synergy low of 20% where the acquired measurement company is mostly focused outside the NO64 scope. The high is 173% for a measurement acquisition tied closely to filtration and separation.

Abbreviations:  FF= fabric filters, SC = scrubbers and adsorbers; FGD = flue gas desulfurization, ESP = electrostatic precipitator, sed = sedimentation and centrifugation; LF = liquid filtration, cart = cartridge; mem = membrane; Air Filt = air filter, NOx= DeNOx, Pump = pumps, Valve = valves, IIoT= guide, control, measure, CR = cleanroom hardware, consumables, service; Other = related process equipment

For more information on this report click on NO64 Air/Gas/Water/Fluid Treatment and Control: World Markets.

Bob McIlvaine can answer your questions at 847 226 2391 or rmcilvaine@mcilvainecompany.com

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