Zenon Environmental Inc. (of GE Water)

Continuing with a look at the water side of the CleanTech sectors,  Zenon Environmental is a good example of start up to acquisition by a major OEM. Their superior technology and process for water purification, coupled with an overwhelming client project list made them an acquisition target for GE Water in 2006.

Strategy: Developing a more efficient, economic and sustainable water purification process.

Product: Zenon’s core product is a hollow fibre membrane that requires less energy to operate than conventional membranes and can be used in relatively small footprint areas on various types of water and wastewater plants. Zenon is a technology leader in the filtration sector, and has stayed ahead by narrowly focusing its capital on membrane technology.

“If you can optimize the membrane filtration process to reduce membrane fouling, then you can save a big chunk of money” said Lakehead University chemical engineering professor Baoqiang Liao who initiated a planned project for Thunder Bay, Canada’s water treatment facility. “Estimates in a report to city council put the savings in cleaning chemicals alone due to the new membrane plant at $24,000 a year. In addition, the city stands to save about $10,000 in energy costs, and about $47,000 in membrane costs.” Thunder Bay is considered a smaller facility, so the numbers improve obviously for larger municipalities.

Management: Ultimately owned and managed by GE Water, Andrew Benedek is the CEO and founder of Zenon.

Early Funding: Stock offering on the Toronto Stock Exchange, Technology Partnerships Canada gives $9.9MM in June of 2000. A 1990 investment is listed by Lyonnaise des Eaux SA,

Comment: Nov. 13th a scandal emerged of an employee stealing $1MM through false invoices over a ten year period from Zenon.

The company was founded in 1980 by former McMaster University chemists professor Andrew Benedek. Benedek developed innovative technology to filter water using hollow-fibre membranes.

The company grew from its modest start to 1,400 employees with plants in Burlington, Oakville and Hungary and filtration contracts worldwide. In March 2006 General Electric agreed to acquire Zenon for approximately $760MM dollars.

If one believes in the future of the water sector, it’s important to identify and understand companies like Zenon before they are acquired.




One comment

  1. Jack Gochett · March 1, 2010

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