Argos Soditic to acquire SNCB Logistics in €70m MBO

The mid-market GP will invest €20m to secure a 66.6% stake in the company, while the remaining €50m will consist of external financing.

Argos's investment will be drawn from its Euroknights VI fund, which closed on its €400m hard-cap in 2010, according to unquote" data.

The vehicle targets small and mid-market European buyouts – investments to date include Cisbio Bioassays in 2013, and Business Integration Partners last year.

SNCB will convert a €25m subordinated loan it had previously supplied to SNCB Logistics into €10m of equity in the company. A fraction of the company's shares will go to SNCB Logistics' management, in exchange for an investment understood to amount to €1m.

The transaction will allow SNCB Logistics to overcome a situation of financial distress, according to Argos.

The railfreight company separated from the Belgian national railway monopoly SNCB in 2011 and reported losses of €40m that year, with further losses amounting to €35m in 2012. However, it generated EBITDA of €3m the following year.

SNCB Logistics was then urged by the European Commission to find external sources of capital, beyond state subsidising. According to Argos Soditic, the executive body of the EU has yet to greenlight the deal.

The company will use the fresh capital to strengthen its position across the Belgian and wider European markets via new direct rail connections, including Swiss Xpress.

Company
Headquartered in Schaarbeek, Belgium, SNCB Logistics is a rail freight operator formed in 2011 as SNCB's freight subsidiary, which offers rail transport and logistics services. The company employs 1,900 staff, and operates 725 single-wagon load trains, 850 block trains and 300 intermodal trains. In 2014, it reported EBITDA of €11m and €452m in revenues.

People
Argos Soditic was represented by president Gilles Mougenot, while SNCB CEO Jo Cornu led the deal for the parent company. Geert Pauwels is CEO at SNCB Logistics.

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• Belgium
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• Unq2015May