CVC- and KKR-backed Van Gansewinkel sells AVR subsidiary

The group of buyers, led by Cheung Kong Infrastructure Holdings (CKI), also includes Cheung Kong Holdings, Power Assets Holdings and the Li Ka Shing Foundation, all of which act as divisions of the Cheung Kong Group. The deal is expected to close in Q3 2013.

The Cheung Kong Group is owned by Li Ka Shing, reported to be Asia's richest man, worth $31bn, and the eighth richest person in the world, according to Forbes.

The deal was sourced via an auction process, which was described by the CKI-led group as "competitive".

As part of the deal, CKI and Cheung Kong Holdings will each take a 35% stake in AVR, while Power Assets will acquire a 20% stake and the Li Ka Shing Foundation will take the remaining 10%.

AVR was acquired by CVC and KKR in January 2006 for €1.4bn. The following February, CVC and KKR bought Van Gansewinkel for a reported €800m and merged the two companies to form Benelux's largest waste management company.

In 2009, the firms committed a futher €520m to the group as part of a major restructuring plan that saw 300 jobs get cut. Van Gansewinkel was still undergoing further restructuring processes earlier this year, with an announcement of a further 600 job losses expected by mid-2013.

AVR, in particular, has seen its workforce shrink from 2,100 at the time of CVC's and KKR's acquisition to its current team of 434. Likewise, the company's turnover was almost halved. At the time of the two firms' acquisition in 2006, AVR was generating turnover of €500m; last year it reached €256m.

Dutch paper De Telegraaf reported earlier this year that CVC and KKR were seeking to dispose of their "problem child", Van Gansewinkel, due to its apparently high debt. Total borrowings for Van Gansewinkel amounted to more than €2bn at the end of 2012, according to the group's financial statement.

Earlier this year, the company confirmed that several of its debt facilities, which were reportedly due to mature this year, have been prolonged by the group's lending syndicate and will now mature in 2017 and 2018.

Van Gansewinkel, which generated revenues of €1.2bn in 2012, is made up of Van Gansewinkel, Coolrec, Maltha, Van Gansewinkel Minerals and formerly AVR.

Company
AVR, which is based in Botlek, Rotterdam in the Netherlands, operates two waste management plants in Rozenburg and Duiven. The company employs 434 staff and saw turnover of €256m in 2012 with an EBITDA of €108m.

AVR operates as a waste management and energy from waste (Efw) service primarily in the Benelux region, although its services are also present in Czech Republic, Poland, France, Hungary and Portugal. AVR holds a 23% share of the waste management market in the Netherlands.

The company converts waste into sustainable energy via incineration and is hoping to gradually transition from its position as a "traditional" waste incinerator to a supplier of sustainable energy. Its two Efw plants sell the heat and steam generated by their activities to nearby businesses and towns.

People
CVC partner Hugo van Berckel and KKR partner Reinhard Gorenflos both sit on Van Gensewinkel's supervisory board, overseeing the board of directors.

Cees van Gent is the CEO of Van Gansewinkel. CKI deputy managing director Andy Hunter led the acquisition for the Cheung Kong Group consortium.

Advisers
Vendor – Credit Suisse (Financial due diligence).

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• Topics
• Exits
• Benelux
• Industrials
• Partial sale
• Trade sale
• CVC Capital Partners
• KKR
• Netherlands