NewQuest To Take China Hydroelectric Private In $190M Deal

New York Stock Exchange-listed China Hydroelectric Corporation says that it has entered into a definitive agreement with private equity firm NewQuest Capital Partners to take the company private.

Hong Kong-based NewQuest will acquire China Hydroelectric for US$1.17 per ordinary share or US$3.51 per American Depositary Share (ADS), valuing the company at around US$190 million.

The price is 18.2% higher than when NewQuest made a preliminary non-binding proposal on September 4, 2013.

NewQuest proposed then to acquire the company at US$0.99 per ordinary share or US$2.97 per ADS for a total of over US$160 million.

The final price presents a 57.4% premium over the closing price of US$2.23 per ADS on September 3, 2013, the last trading day before the proposal was made public.

NewQuest currently owns 49.8% ordinary shares of China Hydroelectric. It also holds options and warrants to acquire additional ordinary shares that could increase its stake of the company to a maximum 56.8%.

China Hydroelectric’s board is recommending shareholders to vote for the privatization deal, which is expected to close during the first half of 2014.

NewQuest was established in 2011 from the spin out of Bank of America Merrill Lynch’s Asian Private Equity team and a portfolio of over 20 private equity investments. It currently manages one fund with capital commitments of approximately US$400 million.

Established in 2006, China Hydroelectric Corporation is an independent hydroelectric power company that owns and operates small hydroelectric power plants in China.

(Update on July 9, 2014: The companies announced that the deal has been completed.)

Caishen.Co - Primary Data for China Secondary Investment and Stock Markets
Caishen.Co - Primary Data for China Secondary Investment and Stock Markets