Filter Clear changes hands in £1.5m deal

FILTER Clear, a Scottish water filtration company backed by transport tycoon Brian Souter, has been acquired by a London-based technology entrepreneur in a £1.5 million deal.

Shareholders in the Glasgow firm, which includes Scottish Enterprise, will become shareholders in acquirer Bluewater Bio, which is aiming for a flotation or trade sale within two years. Its chief executive, David Ishag, expects the deal will value the combined company at £80m.

The waste water treatment specialist floated on the Alternative Investment Market in December 2007 and delisted less than a year later as Ishag felt the company’s market capitalisation did not reflect its true value. “I got 95 per cent shareholder support. I delisted the business and within 90 days I raised institutional money at an 80 per cent higher valuation than my last traded price,” he said.

Since then the firm has raised millions from investors, including £4m from utility investor, Ecofin, and FourWinds Capital Management.

He said Bluewater, which made a loss of £4.2m in the year to 30 June 2010, will break into profit this year and has an order book worth “tens of millions”. He aims to lead a consolidation in the fragmented water technology market. Ishag said: “The last two acquisitions we have done have been for 100 per cent paper and we plan to continue doing so, with cash being used to invest in the new acquisitions to build the business.”

He said that investors such as Souter becoming shareholders of Bluewater “demonstrates that we have a tremendous amount of wind in our sails”. A spokesman for Souter Investments described Bluewater Bio as “an interesting company with significant potential.”

The deal was handled by new Edinburgh merchant bank Inverleith Capital.