MSPEA in take private bid for Sino Gas
Morgan Stanley Private Equity Asia (MSPEA) is supporting a management buyout of Sino Gas International Holdings that values the US-listed Chinese gas distributor at approximately $15.9 million. This would be the third investment from the PE firm's fourth Asia fund, which is expected to close early next year on at least $1.5 billion.
According to a regulatory filing, MSPEA and Yuchuan Liu, Sino Gas' chairman, CEO and president, are offering to pay $0.50 per American Depository Share (ADS) in cash for all outstanding shares. This supersedes a bid made by Liu on his own in April 2012 that valued the company at $0.48 per share.
The transaction will be financed through a combination of equity capital and Liu and other company management and affiliates rolling over their shares into the acquisition vehicle. According to Sino Gas' 2012 annual report, Liu owned 11.3% of the company.
Sino Gas owns and operates natural gas distribution systems in 34 small and medium-size cities in China, serving close to 300,000 residential customers It has approximately 2,039 kilometers of pipeline that delivers 150,000 cubic meters of natural gas each day.
The company posted revenues of $50.4 million in 2012, up 20.9% year-on-year, while net income fell 22.1% to $6.4 million.
MSPEA previously completed the privatization of US-listed Feihe International while a process for Yongye International is still underway.
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