EQT and Canadian pension fund Public Sector Pensions Investments (PSP Investments) have entered exclusive negotiations to wholly acquire Belgium-based Azelis, a distributor of speciality chemicals and food ingredients.
The group's enterprise value exceeded €2bn, according to a person familiar with the situation.
Moreover, the sale generated a multiple in excess of 3.5x for Apax Partners, although the figure will be confirmed upon completion of the transaction, Unquote understands.
EQT has acquired a majority stake in the group, while PSP has bought a significant minority.
EQT is investing via its EQT VIII vehicle. Closed in February 2018 on €10.75bn, the fund provides equity tickets of €125-600m for companies with an average enterprise value of €850m.
PSP will invest both in the equity and the debt of the business, Unquote understands.
PSP Investments' last direct investment in a Europe-based company was for French industrial engineering firm Fives in January 2018. The Canadian fund, alongside peer Caisse de Depot et Placement du Quebec (CDPQ), acquired a minority stake in the firm from Ardian, which retained a minority stake.
Under Apax's ownership, Azelis has more than doubled its revenues and tripled its EBITDA, undertaking nine acquisitions. The business established a North American presence in 2015, via the acquisition of Koda Distribution Group.
EQT and PSP Investments intend to help the group pursue its buy-and-build strategy and strengthen digital capabilities.
In 2007, 3i acquired Azelis from Motion Equity Partners (then Cognetas) in a deal worth €315m. The GP then took part in a €30m capital increase for the company in October 2012 and invested €10m as part of a refinancing for the business the following year.
Apax acquired 3i's majority stake in Azelis in 2015 via its Apax VIII vehicle. Although officially undisclosed, the enterprise value of the deal was thought to be €430m, according to ratings agency Moody's. This represented 10.5x adjusted EBITDA. The deal was thought to have been structured with €180m in equity and some €280m in debt (including a revolving capital facility); the debt structure reportedly consisted of a €180m B-tranche and a €60m strip of second lien debt, according to Unquote Data.
Azelis was founded in 2001 through the merger of Italy-based Novorchem and France-headquartered Arnaud. It has since followed an acquisition strategy to create a global speciality chemicals distribution network – today the group has a presence in around 40 countries. Azelis supports 43,000 customers, has 1,800 employees and sales of around €1.8bn. The group is headquartered in Berchem.
EQT Partners – Bert Janssens (partner); Kristiaan Nieuwenburg (partner).
Azelis – Hans-Joachim Müller (CEO).
Public Sector Pensions Investments – Simon Marc (managing director, head of private equity).
Consortium has offered €18.10 per share, 24% higher than the €14.56 closing price on 23 September
Around €2m comes from Seed Capital, while Vækstfonden is providing a syndicated loan of €1.8m
Company plans to use the financing to strengthen its market position in Spain and boost its international expansion
GP has so far invested in companies in industrial automation, software and business training