CITIC and KKR offer $1.5bn to buy United Envirotech

Chinese conglomerate CITIC and US private equity firm KKR have teamed to buy Singapore-based water treatment company United Envirotech for $1.5bn.

United Envirotech offers membrane-based water and wastewater treatment and reclamation solutions to businesses across chemical, petrochemical and industrial park sectors in China.

The pre-conditional voluntary offer by the consortium values United Envirotech at around S$1.9bn ($1.47bn) on a fully diluted basis.

Under the proposal, CITIC and KKR will form a consortium for the deal with CITIC having a majority interest.

Following the deal, CITIC will become the majority shareholder of United Envirotech, followed by KKR with a 25.8% stake in the company.

CITIC vice-chairman and president and CITIC Environment Protection chairman Mr Wang Jiong said: "Our investment in UEL provides us a strong platform to develop in China’s water and wastewater treatment sector.

"Environmental protection is a top priority for China, and CITIC foresees not only commercial opportunity but also societal 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."

KKR co-founder, co-chairman and co-CEO Henry Kravis said: "We are pleased to announce the formation of our partnership with CITIC.

"It is a world-class company and our experienced team on the ground in China will also leverage KKR’s global expertise and experience to make this a highly successful endeavour."

KKR member, Asia Private Equity co-head and KKR China CEO Mr David Liu said: "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.

"We look forward to continue working with UEL, and now CITIC, as a value-added partner to support its long-term growth and provide much-needed water and wastewater treatment services, which will play a role in addressing China’s water challenges."