CDPQ explores strategic options for Datamars

The institutional investor has asked Goldman Sachs to survey options including a sale of the Switzerland-headquartered firm, whose livestock management and reunification technologies are used by veterinarians and farmers worldwide, the sources said.

With FY22 figures outstanding, CDPQ is expected to see out the end of the year before finalizing a decision on whether to sell, list or refinance the business next year, one of the sources said.

Among logical options for CDPQ include a dual-track process in 2023, a third source familiar with the matter said. But while the market outlook remains uncertain, with high inflation and rising interest rates hampering access to leveraged loans and bonds, the vendor could decide to wait for a better market backdrop to pursue an exit, two of the sources added.

In the event of a sale, Datamars could be marketed off EBITDA of up to EUR 100m, the first three sources and two further sources familiar with the matter said. The company booked FY21 EBITDA in the region of EUR 50m-EUR 60m, three of them said.

Any transaction could value Datamars at as much as 20x core earnings, valuing it at between EUR 1bn-EUR 2bn, according to three of the sources.

A sale of Datamars has been widely anticipated since private equity firms began approaching its owner in the summer of 2020, Mergermarket reported at the time.

Large-cap buyout groups are the suitors most likely capable of supporting equity tickets in excess of EUR 500m that would be required to land a buyout of Datamars, one of the sources said. Astorg, EQT, Partners Group, KKR, BC Partners, CVC Capital Partners, Hg and Montagu have all reportedly been tipped as potential buyers in the past. Still, strategic players would be expected to play a key role in any auction.

French company Antelliq is the most suitable comparable for Datamars, offering a similar idenitifcation business but with a broader offering, as reported by Mergermarket. Antelliq, which owns the Allflex brand, was acquired by Merck from BC Partners for EUR 2.1bn in 2018.

CDPQ invested in Datamars to become the largest shareholder in 2017, joining Columna Capital and Datamars management. Datamars generated EBITDA of around EUR 20m-EUR 30m at the time of CDPQ's investment, according to media reports. Columna has been invested in Datamars since 2011. Intermediate Capital Group has also held an undisclosed minority stake in the company since 2021, as per a public record.

Datamars acquired New Zealand-based animal health firm Simco from The Riverside Company and Tru-Test in 2018. It has also made other acquisitions during its 30-year history.

Representatives for CDPQ, Columna Capital and Goldman Sachs declined to comment. Datamars declined to comment.

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