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Water Industry Deals and News – January/February 2017

March 28, 2017 | Water

The Monthly O’Melveny Water Report includes select transactions and other items of interest occurring during January and February of 2017. Please contact any member of the O’Melveny Water Practice for additional information on any of these items or any related items.  

January

In January, the tracked deal volume consisted primarily of mergers and acquisitions, with some activity in private financings. [Water and wastewater treatment facilities continued to attract the most attention, with consumer drinking water and water utility and infrastructure represented as well. Private financings centered on a consumer drinking water, wastewater treatment and water conservation.]

February

In February, the tracked deal volume was split between mergers and acquisitions and financings. Water and wastewater service providers accounted for most of the activity, with deals in Australia, China, India, Israel, United Kingdom, and the United States.

Mergers & Acquisitions




Nestlé Waters France S.A.S.

January 4, 2017

Societe des Eaux Minerales d'OGEU SAS acquired the bottling plant of Quézac from Nestlé Waters France S.A.S. Quézac water reported turnover of approximately $21.3 million. The jobs will be retained in the process. Founded in 1958 and based in Ogeu-Les-Bains, France, Societe des Eaux Minerales d'OGEU SAS is a subsidiary of Semo group. It manufactures bottled mineral water, fruit juices, and lemonades.

 

Shanghai You Ying Investment Management Co

Shanghai You Ying Investment Management Co

January 6, 2017

Guangzhou Yuanheng Gas Co., Limited agreed to acquire 34.5% stake in Lu Dong Water Transport Co Limited from Shanghai You Ying Investment Management Co. The China-based Guangzhou Yuanheng Gas Co., Limited operates liquefied natural gas processing and distribution services. Lu Dong Water Transport Co Limited is also based in China and offers water transportation services for construction materials.


Mueller Water Products, Inc.

January 9, 2017

One Equity Partners LLC acquired Anvil International, LLC from Mueller Water Products, Inc. (NYSE:MWA) for approximately $320 million in cash. Anvil International, LLC is headquartered in New Hampshire and provides the quality pipe products and services. Mueller Water Products is a leading manufacturer and marketer of products and services used in the transmission, distribution and measurement of water in North America.



National Response Corporation  

January 9, 2017

National Response Corporation (NRC) acquired Water Truck Services, Inc. NRC is based in New York and provides comprehensive, cost-effective and safety driven solutions to the oil and gas, transportation, chemical, industrial, power and government sectors. Water Truck Services is headquartered in Sherwood, OR. It is a leading provider of waste management and environmental services in the Pacific Northwest.  

 

i-Chem Solution Sdn. Bhd 

January 10, 2017

Chembond Chemicals Limited (BSE:530871) signed a share purchase agreement to acquire the remaining 49% stake in I Chembond Water Sdn Bhd from i-Chem Solution Sdn. Bhd. Post-acquisition, Chembond Chemicals Limited (BSE:530871) will own 100% stake in I Chembond Water Sdn Bhd. The JV agreement, toll blender agreement and patent and technical information agreement stands terminated after fulfillment of terms of the share purchase agreement. Chembond Chemicals Limited is based in India and is a manufacturer of a diverse range of specialty chemicals like water treatment, polymers, construction chemicals, high performance coatings, animal nutrition and industrial biotech products. I Chembond Water Sdn Bhd is headquartered in Malaysia.


   

Tibet Water Resources Limited 

January 10, 2017

Three independent investors entered into agreement to acquire 10% stake in Tibet Water Resources Ltd. (SEHK:1115) from Tibet Water Resources Limited for approximately $116 million. Under the terms of the agreement, the three independent investors will acquire a total of 256.88 million shares at $0.45 per share. Upon completion of these transactions, Water Resources will hold 853.68 million shares, representing approximately 33.23% of Tibet Water Resources Ltd. Tibet Water Resources is a holding company whose operating subsidiaries and business activities are principally located in China. Tibet Water has two core business lines, including manufacturing and sales of 5100 Glacial Water and Highland Barley Beer.

 

Ecolab Inc. 

January 11, 2017          

Ecolab Inc. (NYSE:ECL) acquired Abednego Environmental Services, LLC. After the completion of the transaction, Abednego will become part of Ecolab’s Nalco Water business operations. Ecolab delivers comprehensive solutions and on-site service to promote safe food, maintain clean environments, optimize water and energy use, and improve operational efficiencies for its global customers.

   

Aqua New Jersey, Inc.

January 13, 2017          

Aqua New Jersey, Inc. acquired assets of Cliffside Park Associates, Inc. and Oakwood Village Sewerage Associates. Aqua New Jersey, Inc. is a regulated public utility that provides drinking water and wastewater services to residents of various counties in New Jersey. It also offers operations and management contract services to other water and wastewater operators. Oakwood Village Sewerage Associates, LLC is based in Oakwood, Ohio and provides sewage services. 

 

Aqua Pennsylvania, Inc. 

January 13, 2017

Aqua Pennsylvania, Inc. acquired two municipal water systems in the Emlenton Area Municipal Authority’s wastewater system, which serves customers in Venango and Clarion counties, the East Cameron Township water system in Northumberland County, and the investor-owned Honeycroft Village wastewater system in Londonberry, Chester County in the fourth quarter of 2016.

   

China Everbright Water Limited 

January 18, 2017

Qingdao Water Group acquired 50% stake in Qingdao Everbright Water Operating Limited from China Everbright Water Limited (SGX:U9E) for approximately $173,200 in cash. With the transfer of 50% stake, China Everbright Water Limited holds 49% stake in in Qingdao Everbright Water Operating. The China-based Qingdao Water Group provides urban and rural water solutions, investment, construction, design, and supervision of municipal engineering projects, sales of pipeline material and equipment and financing in water-related fields.

Mao Wenxiong Huizhou Tongji Environmental Technology Co., Ltd.

Mao Wenxiong Huizhou Tongji Environmental Technology Co., Ltd. 

January 22, 2017

Huizhou Tongji Environmental Technology Co., Ltd. agreed to acquire Huizhou Xiongyue Taimei Sewage Treatment Co. Ltd. from Mao Wenxiong for $2.6 million. Under the terms of the transaction, Mao Wenxiong will sell 100% of its stake in Huizhou Xiongyue Taimei Sewage Treatment Co. Ltd.. Huizhou Tongji Environmental Technology Co., Ltd. provides sewage treatment and water recycling services, and is based in Huizhou, China. In related transactions, Huizhou Tongji Environmental Technology Co., Ltd. agreed to acquire Huizhou Tonghu Xiongda Sewage Treatment Co. Ltd. from Mao Wenxiong and Mao Wenkai for approximately $2.5 million, Huizhou Ruisaike Water Purification Co. Ltd. from Mao Wenxiong, Mao Wenkai and Wu Haiying for approximately $5.8 million, and Huizhou Eighth Sewage Treatment Co. Ltd. from Mao Wenxiong for approximately $4.4 million on January 24, 2017. 

 

Datang Huayin Electric Power Co., Ltd.

Datang Huayin Electric Power Co., Ltd. 

January 23, 2017

Shenzhen City New China Water Environmental Technology Limited entered into a sale purchase agreement to acquire 49% stake in Datang Huayin Xiangtan Environmental Electricity Generation Company Limited from Xiangtan Feihong Industry Company for $65,500. Datang Huayin Electric Power Company Limited is primarily engaged in the generation and distribution of electricity, and, through its subsidiaries, is also involved in the production and sale of coal, the generation of thermal power, hydropower and wind power, real estate development, project construction and software development businesses.

 

CITIC Envirotech Ltd. 

January 24, 2017

Longjiang Environmental Protection Group Co., Ltd. acquired CITIC Envirotech Water Resource (HEGANG) Co., Ltd from CITIC Envirotech Ltd. for approximately $16 million. Based in Harbin, China, Longjiang Environmental Protection Group Co., Ltd. owns and operates two water treatment plants in China. CITIC Envirotech Water Resource (Hegang) Co., Ltd. also owns and operates water treatment plants.

   

Hao Bai International Cayman Ltd 

January 27, 2017          

The shares of Hao Bai International Cayman Ltd will begin trading on Growth Enterprise Market of the Stock Exchange of Hong Kong on February 14, 2017. Hao Bai International Cayman Ltd intends to use approximately $3.5 million of the proceeds for strengthening of the lead position in the water-related facility service market in Hong Kong and Macau by enhancing the capital base, approximately $1.35 million of the proceeds for the repayment of bank borrowings and finance lease, approximately $644,500 for strengthening the technical and project management capabilities, approximately $451,000 for establishing Macau office/warehouse, approximately $257,800 for purchase of tools and equipment and approximately $618,700 as general working capital.

 

G.E.T. Water Solutions Pvt. Ltd. 

February 10, 2017

Aspirify Energy Pvt. Ltd. acquired G.E.T. Water Solutions Pvt. Ltd. from Clearwater Capital Partners, LLC. G.E.T. Water is a water and wastewater treatment company based in Chennai, India offering treatment products as well as design and implementation services focused on industrial waste management. Aspirify is a waste-to-energy company based in Pune, India currently developing a waste to energy plant in Maharashtra state.

   

Electra Consumer Products Israel (1951) Ltd. 

February 12, 2017         

An unknown buyer entered into an agreement to acquire the clear water business of Electra Consumer Products Israel (1951) Ltd. for US$ 2.7 million. As part of the agreement, Electra will transfer its clear water business, with all of its rights, assets and liabilities, to the buyer. Electra Consumer Products sells electrical consumer products such as air conditioners, refrigerators, and freezers. It’s clear water business manufactures water coolers. The company is based in Rishon Le-Zion, Israel.

Sichuan Guang'an Garden Water System Co., Ltd.

Sichuan Guang’an Garden Water System Co., Ltd.

February 13, 2017

Sichuan Guangan AAA Public Co., Ltd. (SHSE:600979) signed a conditional agreement to acquire Sichuan Guang'an AAA Public Garden Water Co., Ltd from Sichuan Guang’an Garden Water System Co., Ltd. and Sichuan AAA Public Development Group Co., Ltd. for approximately US$ 30.3 million. Under the terms, Sichuan Guangan AAA Public Co., Ltd. will acquire 70% stake from Sichuan Guang’an Garden Water System Co., Ltd. and will issue 20.29 million Class A common shares as the consideration and acquire 30% stake from Sichuan AAA Public Development Group Co., Ltd. and will issue 8.69 million Class A common shares as the consideration. 

   

Albion Water Limited 

February 22, 2017

Wessex Water Ltd. acquired 51% stake in Albion Water Limited from Waterlevel Limited for US$ 0.27 million. Albion is a provider of water and wastewater services in England and Wales. Wessex, a subsidiariary of malasia-based YTL Power International Bhd, is a private provider of water and wastewater services in South West England, serving 1.3 million people.


Venture Capital & Private Financings


Water Intelligence plc  

January 4, 2017

Water Intelligence plc (AIM:WATR) commences share repurchases, under the program mandated by the shareholders in the Annual General Meeting held on July 7, 2016. As per the mandate, the company is authorized to purchase up to 2,000,000 ordinary shares, representing 18.83% of issued share capital. Water Intelligence plc (formerly Qonnectis plc), was incorporated in England and Wales and through a holding company owns the entire issued capital of American Leak Detection, Inc., the Company’s principal trading subsidiary which operates primarily in the United States. American Leak Detection provides non-invasive water leak detection and remediation services throughout the United States, as well as in Canada, Australia, Spain, Belgium and select other countries.

 

Northern Dynasty Minerals Ltd. 

January 11, 2017          

Northern Dynasty Minerals Ltd. (TSX : NDM), based in Vancouver, British Columbia, has granted a period of 30 days to the underwriters to exercise the overallotment option. The company intends to use the proceeds for advancement of the company’s multi-dimensional strategy to address the pre-emptive regulatory action of the U.S. Environmental Protection Agency under Section 404 (c) of the Clean Water Act, to prepare the Pebble Project for the initiation of federal and state permitting under the U.S. National Environmental Policy Act,  environmental monitoring, engineering and environmental studies, field investigations and related technical studies to finalize a proposed development plan for the Pebble Project, enhanced outreach and engagement with political and regulatory offices in the Alaska state and U.S. federal government and among Alaska Native partners and broader regional and state-wide stakeholder groups and Alaskan corporate, tenure and site maintenance.

Protection (Asia) Water Treatment Holding Limited 

Protection (Asia) Water Treatment Holding Limited 

January 13, 2017

Protection (Asia) Water Treatment Holding Limited, which is based in Hong Kong, announced a private placement of 110 shares at $316 per share for gross proceeds of $34,800 on January 13, 2017. 

 


Thames Water Utilities Cayman Finance Limited 

January 17, 2017

Thames Water Utilities Cayman Finance Limited is concurrently offering $312 million principal amount of 1.875% Class A Senior Unsecured Covered Notes due January 24, 2024. Interest on the 2.625% Class A Senior Unsecured Covered Notes due January 24, 2032 will be payable annually. The notes were placed on January 17, 2017. The stabilization period on the notes will be from January 17, 2017 until February 17, 2017. The notes are guaranteed by Thames Water Utilities Holdings Limited, Thames Water Utilities Limited, Thames Water Utilities Finance Limited and Thames Water Utilities Cayman Finance Holdings Limited. 



Public Offerings & Private Financings



South East Water Limited  

February 9, 2017

Unknown clients including investors within Desjardins Group acquired 50% stake in South East Water Limited from Caisse de dépôt et placement du Québec, Desjardins Investment Management Inc. South East Water is a state-owned company, providing water and sewerage services to over 1.3 million customers in the south-east of Melbourne, Victoria, Australia.

 

United Utilities Water Finance PLC 

February 8, 2017

United Utilities Water Finance PLC issued Variable Rate Senior Unsecured Notes due February 10, 2037 as a part of the Euro Medium Term Note Programme. The notes are unconditionally and irrevocably guaranteed by United Utilities Water Limited. Interest on the notes will be paid semi-annually on February 10 and August 10 of each year, commencing from August 10, 2017. United Utilities Water Finance PLC is a debt issuing vehicle operating as a subsidiary of United Utilities Water Limited, that in turn provides water and wastewater services to approximately 3 million households in the North West of England. 


Ruralco Holdings Limited  

February 15, 2017         

Ruralco Holdings Limited (ASX : RHL) is offering approximately 11.3 million shares under placement and approximately 13.2 million shares under an entitlement offer. The company will offer one new share for every six existing shares held by the shareholders as on the record date February 17, 2017 and three major shareholders have committed to take up their entitlements in full.

Ruralco is an Australian diversified agricultural company, headquarter in Hobart, Tasmania. The company intends to use US$ 15 million of the proceeds for acquisition of Irrigation Tasmania (an agricultural irrigation supply company), US$ 12.1 million for acquisition of TP Jones & Co. (an agricultural supply retailer), US$ 5.4 million for acquisition of 50% equity interest in Ausure Consolidated Brokers (an insurance brokerage), US$ 10 million for acquisition of portfolio of other water services businesses, among other uses.

 


Tesoro Logistics 

February 21, 2017         

Tesoro Logistics announced the commencement of an underwritten public offering of 5,000,000 common units representing limited partner interests in the partnership. The company intends to use net proceeds to repay borrowings outstanding under revolving credit facility and to pay a portion of the purchase price for previously announced acquisition of certain crude oil, natural gas and produced water gathering systems and natural gas processing facilities from Whiting Oil and Gas Corporation, GBK Investments, LLC and WBI Energy Midstream, LLC. As of February 17, 2017, approximately $372 million of indebtedness was outstanding under revolving credit facility.

Beijing Enterprises Group Finance Co., Ltd

Beijing Enterprises Group Finance Co., Ltd

February 18, 2017

Beijing Enterprises Group Finance Co., Ltd announced that it has entered into a capital increase agreement for gross proceeds of US$ 1.02 billion. The transaction will include participation from existing investors and new investors. Beijing Enterprises Group is an investment company operating in the natural gas, brewery, sewage treatment, real estate, and high-end equipment manufacturing industries. 

 



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