Close Brothers Sells BWA Water Additives

Close Brothers Private Equity has sold BWA Water Additives, a maker of chemicals for the water treatment market, to United International Bank BSC (Bahrain). No financial terms were disclosed, except that the deal provided Close Brothers with a 3.5x return on an investment originally made as part of a May 2006 management buyout from Chemtura.

 

PRESS RELEASE

Close Brothers Private Equity (CBPE) has sold BWA Water Additives (BWA) to United International Bank B.S.C (U.I.B), an investment bank based in Bahrain, for an undisclosed sum. CBPE originally backed the management buyout of BWA from Chemtura in May 2006 alongside a management team led by Chairman and CEO Dr David Cartmell and has made a 3.5x return on the deal.

 

BWA is a world leader in the development and the marketing of speciality branded chemicals for the water treatment market. Headquartered in Manchester, UK and Atlanta, USA, the business operates in over 80 countries worldwide and has grown revenues from $90m to $120m under CBPE’s ownership. With over 35 years experience in the water treatment sector, BWA’s products are principally used to control the build up of scale and corrosion and to treat microbiological growth in water.

 

Product innovation and development has been key to BWA’s success. This new product development is prevalent across each of its three key target sectors – Desalination, Industrial Water Treatment, and Secondary Oil Recovery in oil fields.

 

The sale of BWA by CBPE follows on the back of its the recent investment in the £129m MBO of Warwick International at the end of August. Warwick is a world leading 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 CBPE. As well as Warwick (acquired from Sequa Corporation), CBPE’s past  investments include Chance & Hunt (acquired from ICI plc), Aroma & Fine Chemicals (acquired from IFF Inc) and Minova International (acquired from BP plc). Common features of these and other chemical deals completed by CBPE 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.

 

Iain Slater, Partner, who led CBPE’s investment in BWA commented: “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 received many expressions of interest in BWA over the past 2 years, so it’s great to see the team continuing with the business with UIB.

 

We will be looking for more investments in the specialist chemicals sector – a key area of focus for us.”

 

David Cartmell, Chairman and CEO of BWA added: “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 UIB, 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 the Royal Bank of Scotland, HSBC and Royal Bank of Scotland Equity Fund. The transaction was structured in accordance with Sharia principles.

 

The management team led by David Cartmell will remain with the business under its new ownership.