Sponsors, trade bidders line up for Deutsche Windtechnik

First round bids for the business, which is a sister company of developer WPD, are due on 17 November, three sources said.

The owners, which comprise the same founders and management as WPD, have mandated Nomura Greentech to sell the business, as reported by Mergermarket last month.

Private equity firm Triton Partners is looking to participate, two sources said. Other private equity funds considering a bid include Agilitas, Deutsche Private Equity and Oaktree, one of the sources said.

Morgan Stanley Infrastructure Partners (MSIP) is another interested suitor, two source added.

DWT, which provides operations and maintenance (O&M) and other services to onshore and offshore wind projects, has contract-based revenues and will be more suited to private equity than infrastructure funds, another source noted.

Interest for DWT may also come from strategic players such as EDF looking to expand their service offering, two sources said. Other bidders may include the two big turbine manufacturers, Vestas and Siemens Gamesa, which have their own O&M divisions and may want to grow their repowering contract book through acquiring DWT, one of the sources added.

Bremen-based Deutsche Windtechnik was founded by WPD in 2004 and reported 2018 revenues of EUR 124m with more than 4,000 wind turbines under basic or full maintenance contracts, according to its website. The US division, which has more than 1 GW's worth of contracts, acquired the wind operations and maintenance segment of Cooke Power Services last month.

Businesses in the segment are likely to sell for around 15x EBITDA, in line with the trading of listed peers, as reported.

However, lenders getting a first look at DWT are concerned that the company's capex and inventory needs are weighing on cashflow and may complicate a potential financing, two sources familiar with the matter said.

The company generated 2019 EBITDA of EUR 8.6m on EUR 169m in sales, an increase of 6% and 18% respectively compared to 2018, according to the company's most recent public filing. Cashflow from continuing operations was negative EUR 1.6m, up from negative EUR 2.7m in the prior year, it stated. It had EUR 5.2m in cash and cash equivalents at the end of the reporting period and EUR 40.6m in bank credits tied up in inventory, according to the filing.

Nomura, Siemens, Vestas, MSIP and Triton declined to comment. The management of DWT and WPD were not available to comment at the time of publication. Agilitas, DPE, Oaktree and EDF did not respond to requests for comment.

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