Ultura rebrands again as break-up continues
Published on by Edyta Bednorz, Global Water Intelligence - Brand Marketing Executive in Business
The membrane specialist has rebranded itself as Sepro Membranes after selling off its core treatment division. It is now looking for a buyer for its after-sales unit.
Troubled membrane technology company Ultura has put its after-sales business on the block as part of a larger divestment programme which saw the group's core membrane business sold to an affiliate of True North Venture Partners for $25 million at the end of December. The maintenance and spare parts division is headquartered in Germany, and is understood to generate around €10 million in annual revenues. It serves Ultura's existing customer base in the marine and leachate treatment markets, offering replacement membranes and membrane modules, as well as chemicals and spare parts. Ultura's deteriorating financial situation is thought to have impacted heavily on the business development activities of the after-sales division, making it a further casualty of the company's rapid downfall, which saw it file for Chapter 11 protection in October following a liquidity squeeze.
The crunch is believed to have come to a head following the negotiation of an $18 million 3.5-year loan with Hercules Technology Growth Capital in September 2013. The loan carried a floored interest rate of 10.00%, but crucially also incorporated a payment-in-kind feature - a high-risk mechanism frequently built in to loans to high-growth companies, whereby unpaid interest is allowed to accrue at a predefined rate, and is added to the principal that must be repaid or refinanced at maturity. The loan agreement is also understood to have granted Hercules security interest over Ultura's assets. The situation became untenable last summer, whereupon the company's owners engaged Wedbush Securities to try to find a buyer for the membrane business. Despite approaching 175 potential investors, however, the assets were ultimately sold to an entity affiliated with True North, the venture capital house which had previously injected $23.5 million into Ultura (then known as APTwater) to fund the purchase of membrane module manufacturer Rochem in 2011. The preferred stock held by True North was subsequently converted into secured debt in order to resolve a litigation case between APTwater and True North. The membrane business, which houses both Rochem and specialist membrane manufacturer Sepro Membranes, has now been rebranded for the second time in under a year, and will revert to its historical trading name of Sepro Membranes. It has been combined with Nanostone Water, the ceramic UF/MF membrane company wich is also backed by True North, with Nanostone CEO David Jellison taking on the role of chief executive at Sepro Membranes, supported by former Ultura COO Simon Marshall as chief operating officer.