Just Water International Sells Their Australian Business to Waterlogic Australia

Just Water International, the water cooler and supplies business 79 percent owned by founder Tony Falkenstein, got the green light last month for the sale of their Australian business for A$11 million, a transaction that will leave them debt free. The Auckland-based company said 76.7 percent of shares on issue voted on the proposal to sell the business to Waterlogic Australia to repay debt and fund growth and 100 percent of those voted in favour. Just Water intends to use the sale proceeds to repay their existing $10.7 million net debt to the bank.

Just Water said they were approached by Waterlogic this year about the acquisition of the Australian water dispenser rental and servicing business and they say the offer values its Australian business at six times 2014 annual earnings before interest, tax, depreciation and amortisation, compared with a Korda Mentha valuation of the Just Water group at four to four and a half times earnings.

"Retaining the Australian business (if valued at the purchase price of A$11 million) produces a lesser return for the group relative to sale," the company said at the time. Growth opportunities for the Australian business were limited because of a lack of new sites, pressure on rental rates and minimal new product development. The sale required shareholder approval because the purchase price exceeded 50 percent of Just Water's market capitalisation. The shares last traded at 15 cents on the NZAX, valuing the company at about $13.5 million.

Falkenstein's investment vehicle Harvard Group made a full takeover bid for Just Water last October at 15 cents a share, trumping an indicative offer of 14.6 cents from an unidentified overseas buyer. He fell short of the target to take the company private, acquiring about eight percent of the shares he didn't already own. Waterlogic, which has operations in 50 countries, was acquired in January by European private equity investor Castik Capital which aims to create a leading global water cooler business.

 Just Water are now looking for other acquisition opportunities, most likely in the context of ‘healthy living’.

Finally, Just Water is about to launch a new website which expects to go live next week, named ‘CEO Guarantee’ - the only CEO of any public company asking customers to contact him, with his personal mobile and email, if they are unhappy with products. For more information on this new site please go to http://justwater.ongoing.co.nz .

For more information on Just Water please visit the website at www.justwater.co.nz .