Severn Trent sells its water purification business to partner Industrie De Nora

UK based water firm Severn Trent has signed an agreement to sell its water purification business to its Italian joint venture partner Industrie De Nora.

As per the deal, Severn Trent’s water purification business is valued at $99m.

Industrie De Nora will buy Severn Trent’s share of $81.2m through a cash payment of $20.1m (£12.6m) while remaining will be adjusted through the settlement of net intercompany debt.

Severn Trent’s water purification business offers disinfection and filtration technology solutions to onshore and offshore energy, marine and municipal market.

The business reported a loss before interest and tax of £39.2m including goodwill impairment charge of £24.6m.

Severn Trent will use the proceeds of the divestment for general corporate purposes.

Both the firms have been joint venture partners in Severn Trent De Nora since 2002. Severn Trent De Nora is a specialist in electrochemical processes used for treating water and wastewater in the municipal, onshore and offshore energy and marine sectors.

Severn Trent said the sale is expected to assist the firm in better management of its core businesses for water and wastewater services sector, which comprises of Operating Services US, Operating Services UK including non-household retail, and renewable energy.

Severn Trent CEO Liv Garfield said: "Over the last 18 months we’ve made a number of improvements to the Water Purification business, including improving our sales process and contract management.

"The business is now on a more stable footing and growing both the top and bottom line. However, it’s clear that in order for the business to fulfil its growth potential it needs manufacturing and product expertise and focus so it’s the right time for it to have a new owner.

"This sale will allow us to focus on our core water and wastewater service businesses in the UK and abroad."

Industrie De Nora chief executive officer Paolo Dellachà said: "Water treatment has always been in the DNA of our company, and a substantial portion of our turnover is generated by sales of products addressing water issues.

"This acquisition certainly enhances the value creation for all customers in need of sustainable solutions for their water treatment requirements and for all our other stakeholders."