Argos Wityu acquires Norline in sixth deal from Mid-Market VIII

Wahida Ahmed
13 February 2023

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European private equity firm Argos Wityu has agreed to acquire Switzerland-based Norline, an outsourcing services provider for building installation companies, in an MBO.

Following the deal, Norline founder Hanspeter Acklin will retain a minority shareholding and his position as CEO. In the mid-term, he will limit his work to the advisory board, according to a press release. With the sale, Acklin has secured an orderly succession process for Norline. Alongside Acklin, 10 managers will also become minority shareholders.

The GP acquired the business through a selective sale process run by Credit Suisse, Rainer Derix, partner at the sponsor, told Unquote.

Argos Wityu deployed equity via its Mid-Market VIII fund, marking the sixth investment from the vehicle, Derix said. The fund is almost 50% deployed, having held a final close in October 2022 on EUR 450m, he added.

The fund deploys equity cheques of EUR 30m-EUR 100m and targets businesses with enterprise values of EUR 50m-EUR 250m. The fund is sector-agnostic and has so far invested in companies based in France, Italy, the Netherlands and Germany, Derix said.

During Argos Wityu's holding period, Norline will grow by expanding geographically and growing its customer base, as well as broadening its service offering and developing its 3D fabrication models, according to the press release. Norline will also continue to invest in sustainable innovations. The business will focus on organic growth but might make some small opportunistic add-ons in the French-speaking part of Switzerland and Germany. It will also invest in earth probe drilling, Derix said.

The company completed three add-on acquisitions in 2021 and 2022, including Xtegrasol, Xtegrasol Kälte, and Fussbodenheizungsfabrik, which enabled it to expand geographically and broaden its service offerings.

With the acquisition of Xtegrasol, Norline expanded into the thermally active building systems segment, an energy-efficient solution for heating and cooling buildings. The company's 3D fabrication models, developed via internal start-up Sequoia Bau, serve the construction sector by allowing companies to outsource tasks, filling in the gaps left by a lack of skilled workers, Derix said.

The sponsor said in the press release that "financial actors have a great role to play in the rerouting of investments towards a greener economy." This investment "fits nicely" with the sponsor's sustainability initiatives, which is one of the reasons it was attracted to this deal, Derix said.

The GP is currently fundraising for Argos Wityu Article 9 Buyout Fund, which launched in September 2022. It is dedicated to investing in European SMEs with a CO2 intensity reduction target of 7.5% per year and a direct focus on environmental performance. The vehicle will deploy EUR 10m-EUR 50m equity cheques across 10 to 12 portfolio companies over its investment period, according to Unquote Data.

Company
Founded in 1986 and headquartered in Neuhausen, Norline employs 200 staff and provides outsourcing services to in the heating, ventilation, air conditioning and plumbing segments. A main focus is on services around exchanging old fossil fuel heating systems with new sustainable heat pumps. Norline offers services including earth probe drilling to taking out the old system for the new heat pump and floor heating systems installation.

Norline posted sales of around CHF 70m (EUR 71m) in 2022.

People
Argos Wityu – Rainer Derix (partner), Frank Hermann (managing partner), Kevin Kunze (investment manager) and Tobias Kappis (associate).

Norline – Hanspeter Acklin (CEO).

Advisers
Equity – Baker McKenzie Switzerland (legal); Ebner Stolz (financial due diligence); Bluemont Consulting (commercial due diligence); KPMG Switzerland (tax).
Vendor – Credit Suisse (M&A); Bär & Karrer (legal).

[Editor's note: The article has been amended to clarify Argos Wityu's Mid-Market VIII fund deploys equity cheques of EUR 30m-EUR 100m, targeting businesses with enterprise values of EUR 50m-EUR 250m and has so far invested in companies based in France, Italy, the Netherlands and Germany.]