6/5/2019 – Global buyout major KKR & Co said that it plans to privatize 800 Super Holdings, a Singapore-listed environmental services provider, through a voluntary conditional cash offer.
According to a regulatory filing, the deal will be routed through 800 Super owner 8S Capital Holdings, which is a wholly-owned KKR-affiliated special purpose vehicle.
The transaction involves an offering of S$0.90 in cash for each 800 Super Holdings issued and paid-up ordinary shares, which places the valuation of the company at S$161 million (about US$118 million).
This represents a premium of 30.6 percent over 800 Super’s one-month volume weighted average price as of April 26, 2019, as per a disclosure to the Singapore Exchange.
KKR intends to fund the offer by providing a hybrid combination of debt and structured equity financing to 8S Capital primarily from pools of capital, its KKR’s Private Credit Opportunities II fund and proprietary investment vehicles.
“This represents an opportunity for shareholders to realize their entire investment in the shares at a premium to historical trading prices,” explained 8S Capital director Lee Koh Yong.
The offer will provide shareholders with means for a clean cash exit that would otherwise not be available given the low trading liquidity of the shares, Lee added.
So far, the trading volume of its shares has been low, with an average daily trading volume of approximately 65,904 shares, 37,641 shares, 32,298 shares, and 85,590 shares during the respective one-month, three-month, six-month, and 12-month period.
Each of these volumes represents less than 0.05 per cent of the total number of issued shares for any of the mentioned relevant periods.
Lee Cheng Chye, the Chief Executive Officer of 800 Super Holdings, commented on the deal saying that, “Our family welcomes the financing solution provided by KKR. The innovative structure of the deal enables us to continue ownership of the company.”
Privatizing the company will give the offeror and the management more flexibility to manage the business, optimize the use of its management and capital resources, as well as facilitating the implementation of any operational change.
It will be able to save on expenses relating to maintenance of a listed status as well as allow the company to focus its resources on operational matter amidst the competitive business landscape.
800 Super is an established environmental solutions provider for both the public and private sectors in Singapore. The company owns an integrated facility in Tuas South that includes a biomass energy plant, sludge treatment plant, and an industrial laundry.
“We are very flexible on the type of support we provide—in this case, the Lee family required a credit-oriented solution, but we are also working with family groups by making majority or minority equity investments,” said KKR Southeast Asia CEO Ashish Shastry.
If the offer becomes unconditional, the offeror will issue fixed rate bonds due 2023 and some 22.2 million convertible preference shares that KKR’s funds will subscribe to.
