KKR & Co. (KKR) has agreed to increase its stake in United Envirotech Ltd. (UENV), a membrane-based water and water treatment provider in China’s chemical, petrochemical and industrial park sectors, boosting its investment by $40 million.
KKR’s share purchase agreement with United Envirotech is the second water-related investment by the private equity firm since Dec. 20, when KKR and United Water, a subsidiary of France’s Suez Environnement Co. (SEV), formed a partnership to operate a water and wastewater system in Bayonne, New Jersey.
United Envirotech said that KKR entered into a definitive agreement with the company for a $40 million common equity investment. KKR subscribed to $113.8 million in convertible bonds issued by UEL in October 2011 to support the company’s expansion, and has worked with UEL “to capture the attractive growth opportunities in China’s water industry,” it said.
KKR “is excited to have the opportunity to increase our investment in UEL,” David Liu, chief executive officer of KKR Greater China, said in the statement.
Proceeds from KKR’s investment, expected to conclude by March, will be used to fund the acquisition of water treatment plants, increase working capital and upgrade existing facilities, UEL said. UEL’s clients include China National Offshore Oil Corp. or Cnooc and Sembcorp Industries Ltd. (SCI) in Singapore, the company said.
Working with New York-based KKR, UEL can “leverage” their global resources, operational capabilities and China team’s local experience and track record, said founder Lin Yucheng, chairman and chief executive of UEL.
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