Water Industry Deals and News – February 2018
March 23, 2018
The O’Melveny Monthly Water Report includes select transactions and other items of interest occurring during February 2018. Please contact any member of the O’Melveny Water Practice for additional information on any of these items or any related items.
Overview
In February, the tracked deal volume concentrated heavily in acquisitions and ranged from the very large to the very small. The tracked global investment and activity in water-related projects increased compared to prior months, with deal activities concentrated around consumer-facing water supply and treatment. China, Japan, and the United Kingdom featured heavily, while deals were also tracked in Philippines, United States, Canada, and Ghana.
Mergers & Acquisitions
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Evoqua Water Technologies Corp. February 1, 2018 Evoqua Water Technologies Corp. (NYSE:AQUA) signed a definitive agreement to acquire Pure Water Solutions. Post transaction, Pure Water Solutions will become part of Evoqua’s Light Industry Technologies division, which is a part of Evoqua’s Industrial Segment. Evoqua Water Technologies is a leading provider of mission critical water treatment solutions, offering services, systems and technologies to support its customers’ full water lifecycle needs. Pure Water Solutions provides innovative solutions in the design, sale and service of water purification systems and components. |
BNN Water Solutions, LLC February 7, 2018 BNN Water Solutions, LLC acquired Buckhorn Energy Services, LLC for $95 million. The acquisition includes Buckhorn SWD Solutions, LLC, a subsidiary of Buckhorn Energy Services. BNN Water Solutions provides water infrastructure and solutions for the energy industry. Buckhorn is a provider of mid-stream gathering systems, saltwater disposal solutions and waste management for the oil and gas sector. |
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Marlowe plc February 8, 2018 Marlowe plc (AIM:MRL) acquired Future Water Limited for $0.88 million. The deal consideration comprised an initial cash consideration of $0.68 million and a contingent cash earn-out capped at $0.21 million, on a debt-free and cash-free basis. The acquisition was funded from Marlowe's existing cash resources. Marlowe is a UK-based support services group focused on acquiring and developing companies that provide critical asset maintenance services. Future Water Limited is a provider of water treatment and hygiene services. |
Yunnan Water (Hong Kong) Company Limited February 13, 2018 Yunnan Water (Hong Kong) Company Limited entered into an equity transfer agreement to acquire remaining 35% stake in Future International Group Co., Limited from Wang Zhi for approximately $31.6 million. The consideration is payable in cash on completion. Upon completion, Future International Group will become wholly owned subsidiary of Yunnan Water. The consideration will be financed through debt financing or internal resources. Yunnan Water (Hong Kong) Company Limited provides sewage disposal services and supplies running and raw water. Future International Group Co., Limited, through its subsidiary, provides tap water supply and tap water engineering construction services. |
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Air Water Inc. February 13, 2018 Air Water Inc. (TSE:4088) concluded its contract to acquire Japan Pionics Co., Ltd from Mitsubishi Gas Chemical Company, Inc. (TSE:4182). The transaction closed on February 28, 2018. Air Water Inc. engages in industrial gas, chemical, medical, energy, and agriculture and food products businesses in Japan. Japan Pionics Co., Ltd. designs, manufactures, and sells gas purifiers and waste gas cleaners. |
February 15, 2018 AquaVenture Holdings Limited (NYSE:WAAS) entered into a binding agreement to acquire a 56% stake in Befesa Desalination Developments Ghana Limited from Abengoa Water S.L.U. for $26 million. The purchase price is subject to adjustment in accordance with the purchase agreement. AquaVenture Holdings has also offered to purchase the remaining 44% economic interest in Befesa Desalination on the same principal terms and is in active negotiations with the relevant shareholder. The deal is subject to customary closing conditions including, among others, the approval of Befesa Desalination’s other shareholders and Abengoa's lenders and the execution of a legally binding heads of terms among the Government of Ghana, Ghana Water Company and Befesa Desalination. Completion of the purchase is expected to occur by the end of the second quarter of 2018. AquaVenture Holdings Limited provides water-as-a-service solutions in North America, the Caribbean, South America, and the Middle East. |
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Seven Seas Water Corporation February 15, 2018 Seven Seas Water Corporation entered into agreement to acquire a SWRO Desalination Plant for $3.0 million. The purchase consideration is subject to adjustments. The deal is subject to customary closing conditions including the approval of the Central Bank of Bahamas. The transaction is expected to close within the next two months. Seven Seas Water Corporation, through its subsidiaries, supplies water to municipal, industrial, and commercial clients in the United States and internationally. |
Manila Water Company, Inc. February 19, 2019 Manila Water Company, Inc. (PSE:MWC) signed a share purchase agreement to acquire a 18.72% stake in Eastern Water Resources Development and Management Public Company Limited (SET:EASTW) from Electricity Generating Public Company Limited (SET:EGCO). Manila Water Company, Inc. intends to finance the transaction through internally generated funds and bank debt. The closing of the acquisition is subject to the fulfillment of certain conditions precedent. Manila Water Company provides water treatment, water distribution, sewerage and sanitation services throughout the Philippines. Eastern Water Resources Development and Management Public Company Limited supplies water to seven provinces in the eastern seaboard of Thailand. Electricity Generating Public Company Limited, together with its subsidiaries, generates and sells electricity to government sector and industrial users primarily in Thailand, the Philippines, and Australia. |
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South Downs Capital Ltd
February 20, 2018 Ancala Partners LLP agreed to acquire South Downs Capital Ltd for an undisclosed amount. Following the acquisition, David Owens, Partner at Ancala, will join the Board of Portsmouth Water, a subsidiary of South Downs Capital, as a Non-Executive Director. The transaction is expected to complete in March 2018. South Downs Capital, through its subsidiaries, supplies water to Portsmouth and surrounding areas in the United Kindgom. Ancala Partners is a principal investment firm that invests in mid-market low risk, inflation linked, brownfield infrastructure assets. |
February 21, 2018 Tabuk Water Corp signed a share purchase agreement to acquire a 99.8% stake in Calapan WaterWorks Corporation from Philippine H2O Ventures Corp (PSE:H2O) for approximately $8.5 million. Under the terms of transaction, Tabuk Water Corp will acquire 137 million shares. The transaction is subject to approval from at least 2/3 of the shareholders of Philippine H2O Ventures Corp., and the confirmation by Udenna Development Corporation and Jolliville Holdings Corporation (PSE:JOH) that the closing of Philippine H2O Ventures will proceed. Tabuk Water Corp owns and operates water distribution networks through the Philippines. Calapan WaterWorks Corporation provides water production and distribution services in Calapan City, Oriental Mindoro. Philippine H2O Ventures Corp., together with its subsidiaries, owns, operates, and manages the waterworks system of Calapan City, Oriental Mindoro. |
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February 23, 2018 Air Water Inc. (TSE:4088) also acquired Tomco2 Equipment Company for an undisclosed amount. Following the acquisition, Tomco2 will continue to operate under the TOMCO2 brand in their Loganville, Georgia facility. Tomco2 Equipment Company manufactures and markets industrial equipment, water technologies, fire systems, and related parts. |
Public & Private Financings
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February 1, 2018 Organica Water, Inc. received $21 million in its series D round of funding, with a second tranche to follow. The financing was led by new investor CITIC Capital Holdings Limited, which participated through CITIC Capital Silk Road Fund (“CCSRF”). The financing was the largest private equity round raised by Organica. The transaction also involved participation from existing investors including IDInvest Partners SA, which invested through its Electranova Capital I Fund. Organica Water is a global provider of innovative solutions for the treatment and recycling of water. CCSRF is a pan-Eurasian themed fund managed by CITIC Capital Holdings Limited with a focus on industries covering energy & resource efficiency, water safety, agriculture and food technology, and transport and logistics service that are related to utilities and infrastructure. |
Tan Hoa Water Supply Company Limited
Tan Hoa Water Supply Company Limited February 2, 2018 Investor Tran Si Nam acquired an additional 9.98% stake in Tan Hoa Water Supply Company Limited. Under the terms, Tran Si Nam acquired 0.5 million shares, increasing its holdings from 0.50 million shares (10.07%) to 1 million shares (20.05%) in Tan Hoa Water Supply Company Limited. |
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Instream Water, Inc. February 13, 2018 Instream Water, Inc. received $1.2 million in funding through a private placement with six investors. Instream Water, Inc., which is based in Alberta, Canada, manufactures and provides water control products. |
Nederlandse Waterschapsbank N.V. February 16, 2018 Nederlandse Waterschapsbank N.V. (“NWB Bank”) announced its offering of approximately $1.25 billion of 1.000% senior notes due 2028 at a 99.547% discount. The Notes were issued under NWB Bank’s existing Debt Issuance Program and were listed on the Luxembourg Stock Exchange. NWB Bank is a leading financial services provider that arranges short-term and long-term loans for water authorities, municipalities, provinces, social housing, healthcare, educational institutions, public-private partnerships and activities in the field of watersupply and the environment. |
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China BoqiEnvironmental Co. February 28, 2018 China BoqiEnvironmental Co (“China Boqi”) announced an offering of 252,227,000 shares, comprising of 216,105,000 new shares to be offered and 36,122,000 shares to be sold by certain of its stockholders. The public offering price was priced at $0.31 per share. China Boqi intends to use approximately $27.5 million for strategic acquisition, approximately $24.1 million for the new concession projects or the upgrade of the concession projects, approximately $16.1 million for sewage treatment, soil and solid waste treatment fields and the development of new business of non-electricity industry, approximately $7.9 million for working capital and other general corporate purposes, and approximately $3.9 million for research and development expenditures, focusing on the gas treatment, water treatment, solid waste treatment and other environmental protection solutions. China Boqi provides general project contracting design, construction, installation, operation, and after-sales service for environmental projects. |
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Saigon Water Supply Company Limited November 14, 2017 Saigon Water Supply Company Limited is selling 9,000,000 shares by auction in International Square Trading Service Joint Stock Company. Saigon Water Supply expects to raise at least $9.3 million through the offering. |