Oasys Water developed a Forward Osmosis process that would be more efficient and effective than the current technology in removing the dissolved solids from water. As the company wanted to introduce this innovation, it needs the financing and partnership to make the product commercially viable.
The company was examining various partnerships with a set of international oil & gas production companies (IOCs), National Oilwell Varco (NOV), a worldwide service provider in oil and gas, and a Chinese EPC company that has expertise in the industrial water and wastewater systems, Woteer.
However, Woteer showed the interest to obtain the Oasys’ forward osmosis technology in China in exchange for an equity investment. Although, Matheson did not have the only right to select the partner solely on his importance to Oasys’ strategic values.
He had to evaluate the strategic benefit along with ensuring the closing a deal, the particular regulations in each deal, and with what speed the deal would be closed, in presence of needs of finance that Oasys require. Whether it would be beneficial to deal with Woteer, and if so, what would be the most appropriate terms for this deal?