AAC sells industrial water purifying firm Desotec to EQT

Kenny Wastell
05 July 2017

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EQT Partners has agreed to acquire Belgian water and air decontamination business Desotec from AAC Capital Partners.

Financial details of the transaction remain undisclosed, though EQT typically makes equity investments ranging between €125-600m. According to recent media reports, the deal was expected to value the business at around 10x its EBITDA, which unquote" sister publication Debtwire reports stands at around €20m.

According to a statement, Desotec has experienced average annual EBITDA growth of 17.5% under the vendor's tenure. It has undertaken international expansion with a particular focus on the western European market. Under its new owners, Desotec will continue pursuing its international growth strategy.

EQT tapped its seventh fund, which held a final close on its €6.75bn hard-cap in August 2015, in order to fund the deal.

Debtwire recently reported that Astorg and Baltisse were also involved in the bidding process. The transaction is expected to complete in August 2017.

Debt
During the bidding process, Debtwire cited four sources familiar with the situation who said the deal was attracting debt bids of up to 6.5x senior/second lien, 6x unitranche and 5x all-senior.

Previous funding
AAC acquired a majority stake in Desotec from the company's founders in April 2011, with management and the founders retaining a minority stake following the transaction.

Company
Founded in 1990 and based in Roeselare, Belgium, Desotec is a producer and distributor of water and air purification and decontamination systems. The company specialises in purification systems based on activated carbon and serves a broad range of industrial and utility customers throughout Europe. It operates three reactivation furnaces with a combined annual total capacity of around 12,400 tonnes of output and has a fleet of 1,500 mobile filters.

Desotec generated around €50m in revenues in 2016, according to a statement issued by EQT, and has a headcount of 110. It has additional service centres in Spain and Poland.

People
EQT Partners – Kristiaan Nieuwenburg (partner).
AAC Capital Partners – Marc Staal (managing partner).
Desotec – Mario Hertegonne (CEO).