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Getting Deals Done: In Solana Beach, a global water giant emerges

In the 1980s, we took all of our water from faucets — washing vegetables, cleaning meat and fish, showering and bathing, boiling water for coffee and cooking, getting a tall glass of water on a hot summer day, watering the lawn and garden.

The water was all the same source, twist the knob, turn the silver lever and let the water flow from municipal water. There were no bottled water empires, spring water industries or water filters.  

So the idea that bottled water or water for sale would become a multi-billion dollar industry in the United States was utterly fanciful.  It was a mirage-like mist or clouds billowing in blue skies. 

In 2020, the global bottled water market size was valued at USD 217.66 billion and is expected to expand at a compound annual growth rate (CAGR) of 11.1% from 2021 to 2028. 

From pipe dreams to billion-dollar industries   

At least, that’s the sense I get talking to Brendon Marks, CEO of Capture H20 in Solana Beach.

“Our Trilogy Investment Group has always been involved in commercial real estate and investments. Candidly, I didn’t want to invest in single-digit cap rates investments for the rest of my life,” Marks said. “It was obvious that there was more opportunity in small market cap and below. Probably a lot more opportunity in companies that make less than two million of EBITDA.”

Capture H20s multipliers are significantly larger than the water bottling industry over a half-century ago —10 to 100-times greater — as they are operating within the B2B industry of water treatment for cooling systems and industrial usage.

Marks and Capture H20 utilizes a proprietary system that uses water softeners and cooling systems for corporate businesses that use water tanks for cooling systems.

They’ve got that new vision, investment bank bona fides and moxie to speak nothing of some pretty valuable partnerships, such as Westfield properties, Irvine Company, Pepsi Co., Gatorade and Callaway Golf. 

“We believe the availability of clean water will become the single biggest issue in the next twenty years,” said Michael Marks, CEO of Trilogy Investments. “We are blessed to be working with world-class companies truly committed to making a real difference in sustainability. They have clear plans of reducing or eliminating their impacts on the environment.”

So, even as Capture H20 walks with its head in the clouds, its feet are planted firmly with strategic partners in the business ecosystem. Cooling towers account for the largest consumption of water in the United States after agriculture and thermoelectric power. 

“We provide commercial water treatment systems for places like bottling plants, data centers, power plants… anything that has cooling,” Marks said. “We are trying to solve for three issues: scale, corrosion and bacteria.  The traditional method is to use chemicals and blow that water down the drain. Our mission is to use innovation to preserve resources and save our customers money. This is precisely what we are built for.”

All of Capture H2O’s cooling water consumption is replaced with wastewater and it is sustainable with virtually no chemicals. 

Capture H2O has creatively addressed the cooling water treatment needs of commercial office buildings for over a decade.  Capture H2O operates in all industries that have an evaporative cooling component. 

The total size of commercial real estate in the U.S. was estimated at $16 trillion in 2018.  All of these new (and existing) buildings need cooling and air conditioning.

Let’s drill down on that market a little more: the global industrial refrigeration system market is expected to grow from USD 19.3 billion in 2019 to USD 24.8 billion by 2025, at a CAGR of 4.3%. 

Capture H20, like Tesla in the auto industry, is also positioned as an essential fixed cost business in a billion-dollar industry within a trillion-dollar industry, mitigating the risk of speculation and strategically positioned for upside gains. 

Marks’ task is that of changing ideas and coming upon powerful interests in an existing billion commercial refrigeration industry.  Marks, however, only notes the opportunity.

“I think the natural progression of innovation is taking place in our industry as well,” Marks said. “Which is great!”  

So far, Capture H20 has managed to save 165 million gallons of water saved for clients annually. But the company’s ultimate goal is to save billions of gallons of water per year. 

The world’s most essential commodity is not oil and gas or American culture in the form of its films and music. It’s water (alongside ingenuity, passion and vision). Capture H20’s gambit is a clever one because it is built upon the guaranteed business in “build back better” America and the all-but-certain commercial real estate boom.

At the helm of SoCal’s Capture H2O behemoth materializing is Marks, bushy-browed and bright-eyed. Brilliant, in fact. But, then again, he is operating in Solana Beach, a city literally named for its sunlight. And, yes his hair is sunburnt auburn and his eyes, sky blue.