Close Brothers Private Equity has sold BWA Water Additives to United International Bank, an investment bank based in Bahrain, for an undisclosed sum.
Close Brothers Private Equity has sold BWA Water Additives to United International Bank, an investment bank based in Bahrain, for an undisclosed sum. Close originally backed the management buyout of BWA from Chemtura in May 2006 alongside a management team led by chairman and chief executive David Cartmell and has made a 3.5 times return on the deal.
BWA specialises in the development and marketing of speciality branded chemicals for the water treatment market, and is active principally in the areas of desalination, industrial water treatment, and secondary oil recovery in oil fields. Its products are notably used to control the build-up of scale and corrosion and to treat microbiological growth in water.
Headquartered in Manchester in England and Atlanta, Georgia, the company has more than 35 years in the sector, operates in more than 80 countries worldwide and has seen revenues grow from USD90m to USD120m under Close Brothers Private Equity’s ownership.
The sale of BWA follows the investment by Close Brothers Private Equity in the GBP129m management buyout of Warwick International from Sequa Corporation at the end of August. Warwick is a manufacturer of TAED, a bleach activator household laundry and dishwashing formulation used in Europe, Latin America and Asia.
The chemical sector has been a key area of focus for Close Brothers Private Equity, with past investments including Chance & Hunt (acquired from ICI), Aroma & Fine Chemicals (acquired from IFF) and Minova International (acquired from BP).
The private equity firm says common features of these and other chemical deals have been strong global market positions, a focus on speciality rather than commodity chemicals, and the potential to expand via acquisition. In the case of BWA, the product portfolio was extended recently with the acquisition of a suite of niche formulations from Atkinson Chemicals.
Partner Iain Slater, who led the firm’s investment in BWA, says: ‘This is a great outcome for us and for the BWA team, who have found a committed new investor for the next phase of growth. We will be looking for more investments in the specialist chemicals sector – a key area of focus for us.’
Cartmell, who with his management team will remain with the business under its new ownership, adds: ‘Having had a very successful period working alongside CBPE, we were only prepared to transition to a new investor if we could find the right partner. In United International Bank, we believe we have done this and we are looking forward to continued strong growth with them in the future.’
Other financing for the transaction was provided by Royal Bank of Scotland, HSBC and Royal Bank of Scotland Equity Fund. The transaction was structured in accordance with Sharia principles.
Close Brothers Private Equity invests in transactions with a value of up to GBP150m in the specialist industrials, business support services, consumer products, leisure, transport and distribution, healthcare and pharmaceuticals sectors.
