Chinese conglomerate Citic Ltd. has teamed with Kohlberg Kravis Roberts & Co. (KKR) to take control of Singaporean water, waste-water and environmental services company United Envirotech Ltd. through an offer which values the stock at S$1.9 billion ($1.5 billion).
Citic will become the largest shareholder in United Envirotech after the S$1.65-per-share offer, while KKR, which already owns 29.7% after the conversion of a tranche of bonds, will be the No. 2.
The companies aim to make a voluntary offer for all the shares and to subscribe for up to S$150 million of shares in a private placement at the same price. They plan to retain United Envirotech's Singapore listing. The S$1.65-per-share offer is 12.6% more than United Envirotech's closing price on Nov. 6, the last full trading day before the announcement. United Envirotech shares closed up 3.4% at S$1.515 in Singapore on Wednesday.
Citic Vice Chairman and President Wang Jiong noted that the company "provides a strong platform to develop in China's water and wastewater treatment sector."
Citic and KKR are making their offer through a Cayman Islands special purpose vehicle. Irrevocable undertakings from shareholders including United Envirotech Chief Executive Officer Lin Yucheng and Chief Investment Officer Pan Shuhong take the bidders' holding to 51%, the majority stake the offer is conditional upon. KKR also owns convertible bonds equivalent to another 10.2% stake. It won't be making an additional investment in United Envirotech for the offer, it said.
United Envirotech has been listed since 2004 and became a KKR portfolio company in August 2011, when the New York firm invested $113.8 million in convertible bonds. It bought $40 million of shares in January 2013.