USG Water Switches Sponsors

Turnspire Capital Partners has sold USG Water Solutions to Warren Equity Partners, exiting a water asset management business it carved out of Veolia North America in early 2023.

USG Water provides maintenance and rehabilitation services for water storage tanks, pipe networks, and concrete structures in water and wastewater treatment plants across all 48 contiguous states. The company’s service model is structured around long-term subscription programs that keep utility infrastructure operational between major capital projects. The company also offers smart metering programs and water quality technologies that give municipal and private water utilities a single source for both physical asset maintenance and operational modernization. 

USG was founded in 1963 as a regional North Carolina-based contractor specializing in the renovation of water storage tanks and expanded over the past six decades into a national platform serving small and medium-sized public water utilities. Today, Atlanta-based USG is led by CEO John Flaugher and has more than 450 employees.

“Turnspire has been a true partner — challenging us and providing invaluable resources, which enabled the USG management team to optimize margins, dramatically increase EBITDA and generate significant cash flow,” said Mr. Flaugher. “At the same time, Turnspire provided support to reinvigorate USG’s commercial function, expand our market footprint geographically and ultimately win record new business. This successful sale validates our collaborative efforts and positions USG for further growth.”

USG Water was acquired by Turnspire from Veolia North America in February 2023 in a corporate carve-out. Under Turnspire’s ownership, the company expanded geographic coverage from 47 to 48 contiguous states, improved margins and cash flow, and added new customers.

“We are extremely proud of the USG management team’s accomplishments during our ownership period under the leadership of CEO John Flaugher,” said Ilya Koffman, a managing partner of Turnspire. “Since carving out USG from Veolia in early 2023, we have worked closely with John to transform USG into a thriving, growing, very profitable business. We are pleased that Warren Equity recognized the value in this unique asset, and we are confident that the sky is the limit for USG going forward.”

The sale of USG is the first full realization for Turnspire from Turnspire Value Fund II LP, which closed in December 2023 with a hard cap of $275 million in capital commitments.

According to McKinsey, the U.S. water utility sector faced an estimated $110 billion funding gap in 2024—nearly 60 percent of utilities’ total spending—driven by aging infrastructure, rising operating expenses, and tightening water quality regulations. McKinsey projects that gap could widen to approximately $194 billion by 2030. The structural shortfall pushes municipal utilities toward private-sector service providers for maintenance, rehabilitation, and metering programs they cannot fund or staff internally, creating durable, recurring demand for businesses with USG’s service model.

Turnspire invests in North American companies with revenues between $75 million and $400 million, regardless of whether they have positive or negative EBITDA. The firm specializes in carve-outs, family ownership transitions, distressed companies, and complex transactions in out-of-favor or misunderstood industries. Turnspire is headquartered in New York City and was founded in 2013.

“USG is a textbook example of the Turnspire investment strategy, which is predicated on finding value obscured by circumstances and realizing that value through transformational operational improvements,” said Abel Osorio, a managing partner of Turnspire. “This sale represents the first full exit in Turnspire Value Fund II, and it delivers exceptional value to our investors and to all of USG’s stakeholders.”

Warren Equity invests in infrastructure services businesses with EBITDA of up to $60 million that operate across the power and utilities, water and wastewater, waste, transportation, digital infrastructure, and buildings and facilities markets. The firm closed its fourth flagship fund, Warren Equity Partners Fund IV LP, at more than $1.4 billion in April 2023 and followed that with the April 2024 closing of Warren Equity Partners ELIDO Fund II LP at its $550 million hard cap. ELIDO II is the firm’s lower-middle-market strategy and targets companies with EBITDA between $5 million and $15 million. Founded in 2015 by Steven Wacaster, Scott Bruckmann, and Henrik Dahlback, Warren Equity is headquartered in Jacksonville Beach, Florida.

Harris Williams and Macquarie Capital were the financial advisors to Turnspire.