| September 13, 2002
Equipment Unit of U.S. Filter Will
Be Sold for $620 Million
By BLOOMBERG NEWS
Vivendi Environment, the water company, agreed yesterday to sell the equipment
distribution unit of its U.S. Filter Corporation for $620 million to private equity firms.
The firms, Thomas H. Lee Partners and J. P. Morgan Partners, will buy the unit, the
Waterworks Distribution Group, which supplies pumps, pipes, valves and water meters.
Vivendi Environnement is selling parts of U.S. Filter, based in Palm Desert, Calif.,
after slowing demand eroded profit. Until June, a majority of Vivendi Environnement was
owned by Vivendi Universal. Stephen Murray, a general partner with
J. P. Morgan Partners, said Thomas H. Lee, based in Boston, and J. P. Morgan, which
originally made separate bids for the unit, planned to pay about $210 million in equity
and borrow the remainder from banks. The banks include J. P. Morgan Chase & Company,
the parent of JPMorgan Partners; the Goldman Sachs Group, which is
advising U.S. Filter on the sale; and UBS Warburg.
Vivendi Environnement bought U.S. Filter in 1999 to help it increase its share of the
global water-treatment market. At the time, 63 percent of Vivendi Environnement was owned
by Vivendi Universal, a media company. Earlier this year, Vivendi Universal reduced its
stake to less than 50 percent by selling shares worth 1.5 billion euros.
Vivendi Environnement announced in March that it would seek 1 billion euros from the
sale of assets that are depressing earnings or not part of its main business.
The Pall Corporation agreed in February to buy U.S. Filter's
filtration and separations business for $360 million in cash. The unit had sales of about
$270 million. U.S. Filter also has a water and wastewater group, which has annual revenue
of $1.6 billion, as well as a consumer and commercial group, which sells water through its