Keppel Infrastructure Trust to acquire water-treatment-chemical maker Ixom HoldCo

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Keppel Infrastructure Trust entered a deal to acquire all of Ixom HoldCo, from certain Blackstone-managed funds and from certain Ixom management shareholders for A$777 million, or S$775 million, the trust’s manager said in a filing to SGX on Thursday.

The enterprise value of the deal was A$1.1 billion, or S$1.10 billion, it said after the market close on Thursday.

Australia- and New Zealand-based Ixom is a supplier and distributor of water-treatment chemicals, such as liquefied chlorine, chlorine derivatives and caustic soda, as well as other chemicals, and it is Australia’s only maker of liquefied chlorine, it said.

Ixom also owns a network of infrastructure, including manufacturing facilities and bulk storage sites in Australia and New Zealand, it said.

Matthew Pollard, CEO of Keppel Infrastructure Fund Management, KIT’s trustee-manager, said the deal would support the stability of the trust’s distribution to unitholders in the long term.

“The proposed DPU yield accretive acquisition of Ixom is strategic for KIT, allowing the trust to gain a foothold in this stable sector of water treatment as well as industrial and specialty chemicals distribution,” he said. “Ixom’s infrastructure-like business and strong position provides the trust with stable and resilient cash flows that are driven by long-term customer relationships and a large, diversified customer base comprising many blue-chip companies and municipalities.”

He noted that the chemicals made and distributed by Ixom are “needed for daily life and many businesses,” including by KIT, which owns and operates water-desalination and wastewater-treatment assets.

The deal will initially be funded via debt, with expectations that a portion of the debt will be paid off with proceeds from an equity fund raising, the timing of which will be determined later, KIT’s manager said.

Keppel Infrastructure Holdings Pte. Ltd., or KIHPL, which holds around 18.2 percent of KIT, intends to subscribe for its entitlement under any preferential offering or rights issue to fund the deal, the filing said.

After the deal is completed, which is expected in the first quarter of next year, KIT’s enlarged portfolio value will be S$5.1 billion, up from S$3.8 billion as of 30 September, it said.

Ixom had posted audited net profit after tax of A$51 million, or S$51 million, for the financial year ended 30 September 2017, while the unaudited net profit after tax for the nine months ended 30 June 2018 was A$33 million, the filing said.

KIT had confirmed its participation in the sale process in mid-October after media reports emerged speculating on its potential interest.