Memstar/ United Envirotech

Memstar/ United Envirotech (UEL): Memstar entered into an agreement with UEL to dispose its shares for an aggregate $293.4m, or $0.11/share, via a cash and share swap arrangement. Cash portion of $73.4m will be offered to existing shareholders of Memstar, and the remaining will be via the issue of 200.1m new UEL shares at $1.10, which equates to a distribution-in-specie for Memstar shareholders on the basis of 1-for-10 UEL shares. The acquisition by UEL is subjected to approval of Memstar shareholders. A non-approval would place Memstar into voluntary liquidation and assets will be distributed to shareholders upon liquidation. The acquisition makes sense for both players, as UEL has been a major customer of the Group, accounting for more than 50% of Memstar's sales. As a combined group, it will be transformed into a vertically integrated water solutions provider with the ability to offer such one-stop solutions to its customers.