Keppel Infrastructure Trust to buy Australian chemical firm Ixom for $775m

It will allow Keppel to gain a foothold in the water treatment sector.

Keppel Infrastructure Trust (KIT) will acquire Australian chemical firm Ixom HoldCo for $775m (A$777m), an announcement revealed.

Keppel Infrastructure Fund Management's (KIFM) wholly owned subsidiary will be taking the chemicals supplier off the hands of management sellers and funds managed by Blackstone Group, which paid $751.43m (A$750m) for the business in 2014.

Ixom, with its subsidiaries Ixom Group, supplies and distributes water treatment chemicals which are key to fundamental industries, as well as industrial and specialty chemicals, KIT said. Its facilities are located throughout regions in Australia and New Zealand, with dedicated third party bulk tankers in select regions.

“The chemicals that Ixom manufactures and distributes are needed for daily life and many business,” KIFM CEO Matthew Pollard said. “It is also a sector we are familiar with given that KIT, in its capacity as owner and operator, uses many of the major chemicals in our water desalination and wastewater treatment assets that are similar to those manufactured and distributed by Ixom.”

Ixom’s DPU for Q3 2018 stood at $0.372 and will remain unchanged, the announcement added. For illustrative purposes, Ixom's DPU would have dipped to $0.345 if the fund-raising was done with a rights issue.

“The proposed distribution per unit (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,” Pollard said.

The chemicals supplier will provide the trust with stable cashflows underpinned by multiple core infrastructure assets and a large customer base comprising including blue-chip companies and municipalities, Pollard added.

Ixom’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the nine month period ended 30 June was $93m (A$93m), whilst net profit stood at $33m (A$33m), the announcement also revealed.

It will initially be funded via a bridge facility of up to $750m (A$752m) and through a five-year senior secured debt funding, known as a term loan, of $531m (A$532m). The term loan will be used to repay an existing Ixom Group loan of $431m (A$432m) and the balance will be used to pay a portion of the purchase price.

The acquisition is expected to be completed in Q1 2019. Upon completion, KIT’s enlarged portfolio will grow from $3.8b to $5.1b, the firm said in a statement.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

ARA LOGOS is currently on the 13th spot.
Meanwhile, the demand for petrochemical exports benefitted from this same crisis.
This is expected to speed up the electronic exchange of trade documents.
This is in support of achieving Absolute Zero Carbon by 2040.
Adults will only shop if goods are discounted by at least 48%, survey says.   About 54% of 1,001 Singaporean adults have plans to shop during the Black Friday sales but only if prices of goods are discounted by at least 48%, a survey from Finder.com showed.
This move is in line with its goal to accelerate recommerce growth in SEA.
The notes were released under its $3m Multicurrency Medium Term Note Programme.
Singtel showed the most growth.
Re-exports also saw an increase of 16.4% in the same month.
The marine company apologised to its workers at the dorm.
SG electricity demand peaked at 7,667MW in October 2021.
The two aim to accelerate the progression of AI.
It will focus on sustainable opportunities for companies in Singapore.
Cargo load factor, however, was down by 1.6% YoY to 97.3%.
Despite this, KF pegs their estimated total sales for the year at 13,000 units.