US headquartered private equity firm KKR & Co LP and Chinese state-backed conglomerate CITIC Ltd have offered to buyout Singapore water treatment company United Envirotech Ltd (UEL).
The offer values United Envirotech, which has been trading on the Singapore Stocks Exchange since April 2004 at S$1.9bn ($1.52bn).
KKR is already the top shareholder in United Envirotech and owns 26% of the company, but post the transaction, CITIC will become the largest shareholder in the Singaporean company.
“The consortium intends to maintain the listing of UEL post transaction,” CITIC and KKR said.
“The transaction will also provide capital for UEL’s further expansion. With CITIC and KKR’s extensive networks and resources, it is envisaged that a further range of opportunities would be opened up for UEL,” both companies added in the statement.
CITIC, with a market cap of about $43.2 billion, is China’s largest conglomerate and its businesses include financial services, resources and energy, manufacturing, real estate and infrastructure, engineering contracting among others, and it has about 120,000 employees on its roles.
United Envirotech had announced in July this year that it was in talks with a potential buyer.
“Our investment in UEL provides us a strong platform to develop in China’s water and wastewater treatment sector.” said Wang Jiong, president of CITIC. “Environmental protection is a top priority for China, and CITIC foresees not only commercial opportunity but also societal benefit from this investment,” he added.
Commenting on the joint investment, KKR’s Co-Founder, Co-Chairman and Co-CEO Henry Kravis said, “We are pleased to announce the formation of our partnership with CITIC. It is a world-class company and our experienced team on the ground in China will also leverage KKR’s global expertise and experience to make this a highly successful endeavor.”
If successful, this will mark KKR’s second major deal in Singapore this fiscal. In May this year, the PE firm said it would spend S1.1 billion to buyout Singaporean packing company Goodpack Ltd.