Nuclear waste management technology developer (and procurer) Kurion has been given the proverbial keys to the kingdom in being bought by French multinational Veolia – access to the resources of a far larger organization with a global scope. Now it must prove itself worthy of those keys, according to Kurion co-founder John Raymont.
The Paris-based energy, water, and waste company says the $350 million acquisition puts it in stronger position to compete in the nuclear cleanup and decommissioning markets, with Veolia anticipating by 2020 that it will be earning $250 million in annual revenue from low-level radioactive waste treatment and $150 million yearly in nuclear technology decontamination. Kurion, which to date has operated in a handful of countries, now has the opportunity to move into markets where its new parent operates.
“So here we have this incredible powerhouse with all this deep know-how, globally situated in all the markets we want to be in, and so from that standpoint they help facilitate the access to those markets and also strengthen our existing bench depth,” Raymont said in April, just days after the deal was finalized. “What they were lacking was really a deep know-how to apply these technologies they already had into the nuclear market, and so they were looking for leadership that was proven leadership with a proven brand that they could … bring into the fold and then set up as their leadership to deliver the technology into their marketplace.”
Veolia already owns several nuclear businesses, including its Alaron Nuclear Services facility in Wampum, Pa., which each year processes in excess of 1 million of radioactive material for disposal or reuse. Part of Kurion’s job now will be to manage, and grow, its new owner’s suite of nuclear operations, Raymont said.
Raymont has been with Kurion since its inception in 2008, first as founder (with Lux Capital Management), president, and CEO. He has been there for development of new technologies, acquisition of others (such as the GeoMelt nuclear waste vitrification system), and operations spanning from the Department of Energy’s Hanford Site in Washington state to the Fukushima Daiichi nuclear power plant devastated by the March 2011 earthquake and tsunami in Japan. The Irvine, Calif.-based firm now has about 200 employees at several locations.
In an extensive Q&A, Raymont – whose title is now president of strategy and chief strategic officer – discussed the sale of the company he founded, how Kurion will fit with its new owner, Veolia’s vision for Kurion, and what markets they hope to enter together.
The interview has been edited for clarity and length.
What are your thoughts on seeing another company take over the business you spent the better part of a decade building up?
You have to view from my perspective that Kurion is my baby, but babies do grow up and you want to see them happily married and off in a successful future.
For us to really deliver on the original dream, it’s great to have a powerhouse like Veolia, not only to have the financial backing, but the fact is they’re extraordinarily deep in very many parallel areas to us. They’re the world-leading water processing company, for example, so they have extraordinary water processing know-how. They do a tremendous amount of waste management. So from that standpoint they fit us very nicely.
They weren’t doing too much in the nuclear space, and that was one of the things they wanted to enter. And I think that crossing the markets from the hazardous market or the municipal market into the nuclear market, generally [it] is the same basic technology in many ways, other than you’re dealing with a dose situation. Oftentimes technologies we in the industry use in the nuclear space come from hazardous [materials] markets.
So here we have this incredible powerhouse with all this deep know-how, globally situated in all the markets we want to be in, and so from that standpoint they help facilitate the access to those markets and also strengthen our existing bench depth. What they were lacking was really a deep know-how to apply these technologies they already had into the nuclear market, and so they were looking for leadership that was proven leadership with a proven brand that they could … bring into the fold and then set up as their leadership to deliver the technology into their marketplace.
Kurion, in fact, will be the leadership for Veolia’s nuclear entrée into the market. In fairness, I should clarify that they’ve already been doing certain things in the nuclear market, but they’ve often been behind someone else like AREVA, they brought a lot of know-how to them and others, and so they wanted to bring that skill in-house.
I should say I’m very happy about the acquisition. It’s a great fit, it’s great to see my baby married to someone who’s going to love her and really take care of her, and I think that’s all great. I’m excited about staying with the company and helping to deliver that vision.
What will your role be?
Right now we run Kurion under a bit of a troika, if you will. Bill Gallo is our CEO, and he is focusing on big sort of deal issues as well as obviously working with our parent in terms of how do we deliver. Jacques Besnainou is our president and COO, so he focuses on our daily operations. And I carry the title of president and chief strategic officer, so I worry about how the pieces all fit together and what’s the strategy, kind of leveraging off my background in the past of how do you take one and one and make three out of that, in terms of looking at technologies and fitting the puzzles together.
So we work very happily together, each complementing the others’ strengths, and hopefully I would tell you we have no weaknesses when you put all three of us together.
Will your duties change under the new ownership?
We’ve actually seen no indications that would change. In fact, actually to the contrary. Veolia already owns several nuclear companies. One is Alaron here in the United States. They have another in France called Asteralis, for example. They have many, many pieces that were already providing technologies into the nuclear market. So all of those initiatives, and those two companies I mentioned, will fold in under Kurion. So, if anything, our existing positions will be strengthened because they’re looking for us to actually leverage all those assets and, again, make one plus one equal three. And that’s what we’re working on.
Between the three of us, I don’t think we envision much difference in our duties, but I would say our responsibilities are increased.
What does it mean for you to be part of this much larger organization, or for Kurion?
It’s the ultimate compliment that someone would like to acquire something you created, and so from that standpoint I’m very humble and very excited about the Veolia acquisition.
I’ll also tell you, you know, it’s a two-way street when you do these things. We had multiple discussions with people in terms of how do we go forward with the company, including investors and others, and quite honestly when we met with the Veolia folks there was a commonality of culture and vision.
At the end of the day culture trumps everything. You look at it and say, are we going to have harmony together? It’s no fun to sell yourself and then find you have disharmony, you don’t have a common vision. … The Veolia people we had had the pleasure of meeting were great people, and they were just really excited and they were dynamic, and so they were fun sort of meetings, it was great to sit and have discussions, and everybody’s excited, and all that sort of circumstance. From that standpoint it was a great fit.
That excitement has sort of trickled down to the rest of the management team that participated as well. As you can imagine we had most of our layers of management participating and doing the due diligence. I can’t think of anybody who’s not happy or excited about the prospect of having this opportunity.
The outlines of the deal have been well reported, but can you say if any promises were made in areas such as financing for Kurion’s work, staff levels, anything along those lines?
I don’t want to get into details, but I can give you the general guidance was that we laid out a vision to them about what we wanted to do, and they’re endorsing it. And all their actions, both before and after, indicate continuation of that endorsement.
I think we’re being given the keys to the kingdom, and if we deliver we’re going to have a great fun ride together.
What is that vision?
Certainly at the most simplistic level is to grow the company. I think if you look at some of the interviews with Mr. [Antoine] Frérot, who’s the CEO of Veolia, his goal was to have a more complete ability to do decommissioning, and we had wanted to make certain expansions, and we’d like to leverage our unique branding. I think the Kurion of the future will retain its core specialty of know-how but will have broader reach in terms of doing things we’re not doing today.
Everything we’re going to do is going to have a leveraging point so that one skill point leverages another. At the end of the day I think you should view us as going after a larger aspect of the decommissioning market as well as the waste management market. That’s what Mr. Frérot is envisioning, and that’s very much consistent with our goal, too.
Are there particular areas of those markets that Kurion hopes to get into?
I think you know that we already have leading skills in, for example, robotics. We arguably have the leading robotics firm here in the United States as well as in the U.K. with Oxford Technologies.
Those are good examples of how do we take those existing assets, strengthen them, and continue to grow the business. So we’re looking for that.
We also look to hopefully help the Department of Energy in some of the challenges it has, as well as certainly the [Nuclear Decommissioning Authority] in the U.K. There’s many interesting challenges at the Fukushima Daiichi plant that we would like to leverage. Not only do our core technologies allow us that entrée, and these are proven skills now, with Veolia behind us we can actually broaden that perspective and really do it more turnkey that we would’ve in the past. That’s been very welcome by a number of customers.
You’ve gotten into the benefits of this merger. But is there anything that Kurion might have been able to do as a stand-alone entity that it perhaps loses now that it’s part of a larger, theoretically less nimble business?
That might be something to ask me in a year from now. Right now, I think we’re all excited with each other, we’re having a honeymoon. One could say, well, you’re part of a very big corporation, and there’s probably some decision-making inertia, and that’s probably not an unrealistic expectation.
However, I would tell you right now that we’re being given a long leash, and I think it’s like anything in life: If we deliver, and we’re demonstrating that we really can deliver and are successful, you can imagine that that long leash will remain. If people think, “Oh my gosh, you people aren’t delivering,” I think people start to shorten it. That’s a natural approach, whether it be Kurion or any other organization.
At this point I would say it’s still very much a honeymoon phase, and I would say Veolia wants us to succeed. They’re asking us what are the tools you need, and what do you need to get there? I think it’s just the most positive circumstance at this point.
Does being folded in with some of the Veolia branches, is it a situation of they are now resources for Kurion, or is it more work to manage those other businesses as well, or some combination of the two?
One of the issues as we grew Kurion, we were very, very focused on culture, and each business has its own culture. We don’t wish to have someone come in who has a working scenario and for us to damage that.
The way we envision it, at least at this point, is there’s really two aspects of Veolia. One of which is you have these two companies, and from that standpoint they’re not going to be – at this point at least; maybe down the road we think of something else if what I’m going to say doesn’t work – but at this point they seem to have good working teams. They’ll still remain their own entities and their own missions.
We’re going to work to maybe bundle our services, how we can do that and come up with new scenarios.
I said there were two aspects. The second one is, this huge company has many, many opportunities to participate in the market, and they actually have in the past, most famously in the Fukushima project in 2011 supporting AREVA. So they have the skills they’ve delivered. Our goal will be how do we go ahead and leverage that and bring those tools in from other entities within Veolia that are not nuclear entities but have skills that you can bring into the nuclear market.
That’s probably the bigger challenge simply because it’s a big company. But I can tell you right now there’s tremendous enthusiasm.
Acquisitions have been part of Kurion’s business model for a number of years. Was that done perhaps with an eye toward one day merging with a larger company?
No, I think it was done solely because it made sense for us as an entity. I think if you [worry] about how do you sell a company you end up losing track of what you’re really doing. Quite honestly, we bought the GeoMelt technologies in 2012 … because we already had a competing in-container vitrification system, and the only competitor out in the market we thought would cause us any concern was GeoMelt. So when the opportunity came to acquire them, and there’s more maturity with their technology than ours, it made great sense.
When we looked at acquiring Vista [Engineering] it made good sense because they’re a named subcontractor to [Washington River Protection Solutions], which is managing the tank farm at Hanford. So it gave you an instant entrée. Plus the fact that we had already months earlier made the decision … to relocate our engineering to Richland [Wa.]. So it was a great consolidation move for us.
So those are purely synergies for our current business, how to leverage our current business. It wasn’t saying, “Well, if we take from here and add from there, etc., we somehow look more attractive to a buyer.” If was really, how do you strengthen the business? I think if you focus on how do you strengthen the business the buyers will take care of themselves.
