EMEA: EQT in exclusive negotiations to acquire Saur

23 July 2018 - 12:00 am UTC

EQT Infrastructure has entered into exclusive negotiations to acquire French water utility Saur, the two companies said in separate statements on Monday (23 July).

EQT Infrastructure Fund III was one of the four bidders due to submit their final offers for Saur Group’s holding company Holding d’Infrastructures des Métiers de l’Environnement (HIME) by a 20 July deadline, as reported.

The three other bidders were understood to be KKR Infrastructure, I Squared Capital, and a consortium of Meridiam and Canada’s Caisse de Depot et de Placement du Quebec (CDPQ).

The sellers are Saur’s existing shareholders, including BNP Paribas and Groupe BPCE. BNP Paribas will continue to be invested with a minority stake in the company, alongside EQT.

Saur’s owners put the asset on the block in November last year with the appointment of advisers, which comprised BNP Paribas, Morgan Stanley and BCPE-owned Natixis. A total of 11 non-binding bids were received earlier in the year.

The Saur Group board, led by former Vinci Concessions CEO Louis-Roch Burgard, announced on 3 April that it would seek one or more partners to support the company’s development and growth plans.

The company said at the time that existing shareholders might continue to hold up to 30% of Saur, with the other 70% being sold to infrastructure investors.

The deal’s value has not been disclosed, but according to reports the majority stake is valued at circa EUR 1.5bn, equivalent to an 11x multiple based on the company’s 2017 EBITDA of EUR 131m.

The deal, which would be EQT’s first French investment, is conditional to regulatory approvals. A financial close is targeted for the end of 2018.

Buy-side advisers include Rothschild (financial) and Clifford Chance (legal).

Saur serves around 7,000 French local authorities – mainly small and mid-sized municipalities – under long-term contracts.

It also has a presence abroad, mainly in Saudi Arabia, Scotland, Spain and Poland.

The group recorded revenues of EUR 1.29bn last year. The company has a target of EUR 2bn revenues by 2022.