RelyOn Nutec sponsor Polaris preps autumn sale via Houlihan Lokey

The sellside is planning to launch the process in the European autumn, one of the sources and a third source familiar with the situation said, with one of them adding it could start within 3Q.

RelyOn Nutec, previously known as Falck Safety Services, has a score of 30, according to Mergermarket's Likely to Exit (LTE) predictive algorithm*, to which the holding period is a substantial contributor.

The company generated DKK 895m (EUR 120m) FY22 revenue with DKK 184m EBITDA, and expects revenue in the region of DKK 1bn-DKK 1.5bn and DKK 210m-DKK 230m EBITDA for FY23, according to a company press release.

For FY21, the company recorded DKK 657m revenue, and DKK 108m EBITDA, as per the company’s 1Q23 report.

The sell-side hopes to get an enterprise valuation in the region of EUR 300m-EUR 350m for the asset, one of the sources said.

Given the business’ strong performance over the last few years, it makes sense for Polaris to seek an exit now, a banker tracking the situation said.

However, RelyOn Nutec’s exposure to the volatile commodities markets - particularly the oil and gas sectors - is likely to make the asset a challenging sale, a fourth source familiar with the situation and a Nordic M&A executive tracking it said.

On the other hand, a fifth source familiar with the situation argued that only a small portion of its customers are those most exposed to price fluctuations, namely drillers searching for new fields oil and gas fields. RelyOn Nutec serves the whole energy ecosystem and thus benefits from the growing need for training and education in the green transition, including wind and the electrical grid expansion, this source added.

In 1Q23, the company derived 66% of its revenue from the oil and gas sector, followed by renewables (11%), maritime (6%), electrical (3%), and other unspecified segments (14%), according to the quarterly report.

The sellside is presenting RelyOn Nutec as an e-learning platform company, two of the sources said.

In 1Q23, 19.5% of the company’s DKK 200m revenue was what it calls digital and blended learning revenue, while 13.5% was annual recurring revenue, up 34% and 59%, respectively, compared to the same period in the previous year, according to the report.

RelyOn Nutec offers training, e-learning, applications, simulation technology, managed services, and consultancy for safety critical industries, according to the company’s website.

The company was carved out of the Danish emergency services provider Falck Group on 20 September 2018 and acquired by Polaris Private Equity via BidCo RelyOn Nutec A/S, as per the company’s website.

In April, the company announced that to support organic and inorganic growth opportunities, it had mandated Pareto Securities to conduct a series of fixed income investor meetings and, subject to market conditions, a bond issue in an amount of up to EUR 75m may follow.

The net proceeds from the bonds are intended to be used to repay the group’s outstanding EUR 57m bond (including PIK interest, ISIN: NO0010831373), repayment of the outstanding RCF facilities and to finance general corporate purposes, including acquisitions and investments.

Polaris declined to comment. RelyOn Nutec and Houlihan Lokey did not respond to requests for comment.

by Auri Aittokallio, Josh O’Neill, Gustav Hoejmark-Jensen, and Karin Jensen

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.

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