Xylem Inc.

Before the market opened on August 9, 2023, noted short seller Spruce Point Capital issued a report on Xylem Inc., alleging numerous misrepresentations regarding Xylem’s May 2023 acquisition of Evoqua Water Technologies for $7.5 billion. According to the report, an interviewed former Xylem executive said the $140 million in revenue synergies should actually be “mark[ed] at zero.” Moreover, says the report, Xylem’s proxy statement “represented that it could complete the transaction with cash on hand,” but the Company instead “had to access short-term commercial paper and term loans to meet its obligations.” The report also highlights that Evoqua “was recently charged with revenue accounting fraud by the SEC and remains under federal investigation” and quotes a former Xylem executive, who said Evoqua’s financials were “a maze” and “complex.”