On 13 November 2014, Poseidon Bidco Limited (“Poseidon”) a vehicle controlled by EPIC funds and managed by Castik Capital, announced that it had reached agreement with the Board of Waterlogic plc on the terms of a unanimous recommended cash Acquisition pursuant to which Poseidon will acquire the entire issued and to be issued share capital of Waterlogic.
Waterlogic designs, manufactures, distributes, services and sells point-of-use water machines and purification systems worldwide. The business has installed 780,000 units across 50 countries and has market leading positions in Australia, USA, Scandinavia, Germany and France. Waterlogic also owns a state-of-the-art manufacturing and R&D facility in China.
The consideration of 151 pence for each Waterlogic Share values the entire issued and to be issued share capital of Waterlogic at approximately £122.6 million ($195.2 million) and represents a premium of approximately 58.1 per cent. to the average Closing Price of 95.5 pence per Waterlogic Share over the three months prior to 11 November 2014.
The deal follows a review of strategic options undertaken by the Waterlogic Directors that concluded that the sale of the Company to Poseidon is in the best interests of, and delivers attractive value for, Waterlogic Shareholders, as a whole.
Poseidon is an entity which has been incorporated for the purposes of making the Acquisition. The cash consideration payable under the terms of the Acquisition will be funded by equity financing to be provided by EPIC Funds, which are managed by Castik Capital S.à r.l., and bank facilities of up to £69m to be provided by Santander UK plc, GE Corporate Finance Bank SAS, HSBC Bank plc, ING Bank N.V., London Branch and Société Générale London Branch.
Commenting on the Acquisition, Ariel Recanati, Non-Executive Chairman of Waterlogic, said:
“Poseidon’s recommended cash offer announced today provides Waterlogic Shareholders with the opportunity to exit their investment at a significant premium, while also providing Waterlogic with the solid platform it needs in order to continue its Commercial and Consumer investment plans and to remain at the forefront of consolidation in its industry. Poseidon’s recommended cash offer represents the culmination of an extensive strategic review and Formal Sale Process that the Waterlogic Independent Directors believe delivers attractive value to Waterlogic Shareholders as a whole.”
Commenting on the Acquisition, Michael Phillips of EPIC Funds, said:
“Waterlogic is a leading provider of POU systems with strong market positions across a range of international operations. Our strategy is to deploy significant capital to support the growth of the business, both organically and via acquisitions, which would not otherwise be available to Waterlogic as a quoted company suffering from limited liquidity. We are excited to be partnering with Management to deliver a strategy to consolidate the water market further, potentially both in terms of POU and BWC units. Waterlogic has built an enviable position through its technology leadership and we look forward to leveraging this international platform.”
Smith Square acted as financial adviser to the Waterlogic management team led by CEO Jeremy Ben-David.