Sembcorp Industries in deal to acquire US water services firm Cascal for US$206m

By Desmond Wong


SINGAPORE: Sembcorp Industries is making an offer to buy the US-listed listed water and wastewater services firm Cascal for as much as US$206 million.

As part of the deal, Sembcorp's utilities unit has offered to buy a 58.4 per cent stake in Cascal now owned by Biwater Investments.

Sembcorp is offering US$6.75 per share if it gets at least 80 per cent of the outstanding common shares have been validly tendered and not withdrawn.

The price will be brought down to US$6.40 if the number of shares tendered is less than 80 per cent.

Sembcorp said it will then make a tender offer for the remaining shares that it doesn't already own.

Sembcorp added this acquisition will transform it into a global water service provider and provide the platform for the group to accelerate its future growth.

The entire acquisition is expected be funded by internal funds and borrowings.

Sembcorp expects the purchase to be accretive to earnings starting from the second year.

Cascal is a leading provider of water and wastewater services.

The company operates in 21 locations across eight countries - the United Kingdom, South Africa, Indonesia, China, Chile, Panama, Antigua and the Philippines and four continents.

It has a growing customer base of homes and businesses that represent a total population of about 4.7 million people.