Brookfield Business Partners (BPP) and institutional clients of Brookfield Asset Management have closed their acquisition of a 70 percent stake in Odebrecht Ambiental, a Brazilian water distribution, collection and treatment company. The deal, announced in October, reflects a total investment of US$908 million. Brazil’s FI-FGTS continues to own a 30 percent interest in the business, which will be renamed BRK Ambiental. BRK is one of the first platform investments of Brookfield Capital Partners IV, which raised US$4 billion last year. BPP, a listed vehicle, was launched in 2016 to participate in Toronto-based Brookfield’s private equity deals.
Brookfield Business Partners Completes Acquisition of Leading Brazilian Water Distribution, Collection and Treatment Business
Business to be renamed BRK Ambiental
BROOKFIELD, NEWS–(Marketwired – April 25, 2017) – Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) (“Brookfield Business Partners”) announced today that, together with institutional partners, it has completed the previously announced acquisition of a 70% controlling stake in the core water, wastewater and industrial water treatment business of Odebrecht Ambiental, for a total investment of US$908 million. Under its new ownership, the business will be renamed BRK Ambiental.
The investment is comprised of a payment of US$768 million to the seller and approximately US$140 million in additional capital contributed at closing to fund working capital requirements and support expected growth of the business. In addition, Brookfield Business Partners and its institutional partners expect to purchase a direct interest in related assets held through a joint venture for US$116 million.
Brookfield Business Partners’ share of the capital invested at closing was US$340 million for an ownership interest in the business of 26%, and its share of the direct asset purchase is expected to total US$44 million. A future payment to the seller of up to R$350 million (approximately US$115 million at the current exchange rate) may be made if the business achieves certain performance milestones over the three years following closing.
“We are pleased to have completed the acquisition of the largest private water distribution, collection and treatment company in Brazil, and are encouraged by the number and scale of growth opportunities we see for it moving forward,” said Cyrus Madon, CEO of Brookfield Business Partners. “We believe BRK Ambiental can capture a growing share of the water and sewage improvements planned in Brazil over the next two decades, supporting strong and stable returns for Brookfield Business Partners.”
FI-FGTS, the investment arm of Brazil’s Employees’ Severance Guarantee Fund, continues to own the remaining 30% interest in the business.
Brookfield Business Partners is a business services and industrial company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs. Brookfield Business Partners is listed on the New York and Toronto stock exchanges. Further information is available at http://bbu.brookfield.com. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.
Brookfield Business Partners is the flagship listed business services and industrials company of Brookfield Asset Management, a leading global alternative asset manager with approximately $250 billion of assets under management. For more information, go to www.brookfield.com.
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Photo courtesy of Odebrecht Ambiental