Hawkins, Inc. Acquires WaterSurplus: A Strategic Play in Water Treatment’s High-Growth Arena

Hawkins, Inc. has taken a significant step toward solidifying its leadership in the water treatment sector with the acquisition of WaterSurplus, a specialist in sustainable filtration and advanced engineering solutions. The $400 million deal, finalized on April 25, 2025, positions Hawkins to capitalize on rising global demand for clean water technologies while diversifying its revenue streams and expanding its technological arsenal.

Strategic Rationale: Building a Full-Service Water Treatment Giant

The acquisition is a masterstroke in strategic alignment. Hawkins, already a leader in water treatment chemicals, now gains WaterSurplus’ patented filtration systems—such as the energy-efficient NanoStack™ and ImpactRO™—which reduce operational costs for clients by minimizing membrane cleaning and energy use. These technologies address critical challenges like PFAS (“forever chemicals”) remediation and high-salinity water treatment, aligning with tightening environmental regulations and corporate sustainability goals.

By combining its chemical expertise with WaterSurplus’s engineering and equipment manufacturing, Hawkins can now offer end-to-end solutions to a customer base of over 10,000 clients, including Fortune 500 companies in food and beverage, industrial manufacturing, and municipal utilities. Cross-selling opportunities abound: Hawkins’ specialty chemicals can be paired with WaterSurplus’s filtration systems, while WaterSurplus’s rental units and design services open new revenue streams for Hawkins.

Financial Synergies: High Margins, Strong Growth, and Strategic Leverage

Financially, the deal is a win-win. WaterSurplus contributed $10 million in adjusted EBITDA in 2024, and the integration is projected to boost Hawkins’ Water Treatment segment’s revenue to exceed $500 million by fiscal 2026, up from an estimated $350 million in 2024. While the acquisition isn’t immediately accretive to EPS, it will become so by 2027, with near-term margin improvements in the Water Treatment division.

Funding the deal through a newly expanded $400 million revolving credit facility (up from $250 million) signals confidence in Hawkins’ ability to manage debt. The post-acquisition proforma leverage ratio of 1.7x trailing 12-month EBITDA leaves ample room for further acquisitions, a key advantage in consolidating a fragmented industry.

Industry Momentum and Customer Demand

WaterSurplus’s expertise in municipal water treatment—serving clients with contaminant removal for PFAS, iron, and radium—aligns with surging demand for infrastructure upgrades. Municipalities worldwide are investing in aging systems, and Hawkins now holds a competitive edge in securing long-term contracts. Meanwhile, the food and beverage sector’s reliance on high-quality process water ensures steady demand for WaterSurplus’s filtration systems.

Risks and Mitigation: A Proven Track Record of Integration

As with any acquisition, risks exist, including integration challenges and market competition. However, Hawkins has a strong record: it has completed 13 acquisitions in five years without disrupting operations or customer relationships. WaterSurplus’s founder, John Barelli, will remain involved, ensuring continuity in technical leadership.

Conclusion: A Watershed Moment for Hawkins

The WaterSurplus acquisition is more than a financial transaction—it’s a strategic pivot to become a full-service water treatment powerhouse. By merging chemical innovation with advanced filtration, Hawkins is well-positioned to dominate high-margin segments like PFAS remediation and sustainable reverse osmosis. With a leveraged ratio of 1.7x EBITDA and a clear path to $500 million in Water Treatment revenue by 2026, the deal sets Hawkins up for long-term growth and shareholder value.

Analysts at BWS Financial note Hawkins’ stock has risen 15% year-to-date amid investor optimism about its water treatment ambitions. As global water scarcity and contamination concerns intensify, Hawkins’ integrated solutions are likely to gain traction—making this acquisition a cornerstone of its future success.