Water Treatment Services (“WTS”) is an independent, Australian owned company providing innovative products and solutions to water quality issues in a wide variety of Industrial, Municipal, Mining and Environmental applications. The company provides a total service concept (including specialty chemical treatment programs) focusing on achieving cost effective outcomes for customers through innovation and developing tailored / customised chemical treatment products specifically suited to the operating environment.
WTS engaged Nash Advisory in March 2018 in order to assist in the negations with a large multi-national company that had made an unsolicited offer to buy the company. Until that time, the owners of WTS had not considered selling the company due to recent success it had achieved.
Upon the unsuccessful conclusion of those negotiations, the shareholders asked Nash Advisory to take the company to market. We developed a tailored market campaign whereby we only approached a selected group of buyers.
Industrial Water Treatment
WTS was the leading water specialist in the energy sector with major clients operating coal fired power stations. The company was focused on diversification of its customer base and had begun implementing initiatives to enter or expand their services into other sectors such as food, manufacturing and mining.
Although the company had an excellent platform to grow further, the owners were nearing retirement age and they decided that for the future success of the business and existing employees, it would be better to sell the company and ensure its heritage in the water sector.
WTS was the clear market leader for providing specialist water treatment services to the power industry – specifically coal fired power stations. Nash undertook detailed analysis of the electricity market to assess the useful life of coalfired power stations in Australia. This analysis provided buyers with a clear view of the WTS customer profile and future revenue that would be received depending upon the timing of powers station closures.
Nash were able to find a trade buyer that not only wanted to grow but was also looking to expand its service and product offering in the Australian market. Given the high quality, service-based model adopted by WTS, due diligence focused heavily on the employees of WTS. The buyer was keen to promote and enhance the internal learnings and experience of the staff.
During the due diligence process, Water Treatment Services had a long-term contract that had expired and was up for retender. Extreme care was taken to manage commercially sensitive information provided during due diligence, as the buyer was also potentially a bidder for the same tender.
The offer included a translation of working capital to the buyer. WTS operated in a very cyclical industry where working capital fluctuated heavily over the course of a year. In addition, WTS had grown upwards of 20% per annum for the last 3 years of operations. The negotiations on working capital required significant analysis and modelling to reach a position that was satisfactory to the owners.
Nash Advisory appointed by WTS to assist with negotiations with a large multi-national company.
Nash assist WTS to agree a term sheet and due diligence begins.
Due diligence completed however the final offer made is rejected by WTS.
Nash Advisory launch a sale campaign and begin speaking to alternative potential buyers.
Nash receive 5 offers for the company. MAK Water is selected as the preferred buyer.
Term sheet signed and due diligence commenced.
Due diligence temporarily suspended due to COVID 19.
Due diligence recommenced with a revised timeline and exclusivity period. Final definitive agreements agreed and signed.
When it comes to selling your business, Nash Advisory offers a highly detailed and extremely thorough process that produces the best possible results.