KKR, CITIC offer to buy controlling stake in United Envirotech

Singapore-listed UEL provides engineering services to municipal and industrial waste water treatment projects in China, and has clients from the chemical, petrochemical and industrial park sectors.

Under the pre-conditional voluntary offer, CITIC Environment Protection and KKR China Water Investment will acquire a controlling stake in the business through the acquisition of shares from existing shareholders - including a separate KKR-owned vehicle - at S$1.65 apiece.

Upon completion of the deal they will provide additional capital to UEL through a subscription to further shares via a private placement worth S$50 million, S$100 million or S$150 million. UEL will remain listed post-transaction. The investment will allow the two parties to help grow the business in China's rapidly-developing environmental protection sector.

"Environmental protection is a top priority in China, and CITIC foresees not only commercial opportunity but also social benefit from this investment. We are always seeking strategic and forward looking opportunities such as this which we believe will create value for our shareholders," said Wang Jiong, vice chairman and president of CITIC, in a statement.

KKR invested $40 million in UEL last year, having previously committed $113.8 million to the company through a subscription to convertible bonds in October 2011.

"Since 2011, we have been working closely with UEL’s strong management team to enhance UEL’s technological platform and expand its business through organic and inorganic activities," said David Liu, co-head of Asia private equity at KKR and CEO of KKR China.

The transaction still requires regulatory approval.

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• Topics
• Greater China
• Buyouts
• PIPEs
• China
• KKR
• buyout
• PIPE