CataCap, Access buy GSV and Pitzner for DKK 800m

The Danish GP's acquisition of the second- and fifth-largest equipment rental companies in Denmark was made with direct co-investments from pension fund Danica and French fund-of-funds manager Access Capital Partners.

Both co-investors are LPs in the DKK 1.1bn CataCap I vehicle, CataCap's first fund, which was used to finance the transaction. The buyout is CataCap's fourth and will create the largest equipment rental company in Denmark by market share.

CataCap's acquisition will see the GP take a majority stake in the newco, which will will trade under the name GSV Materieludlejning, with the two companies' management teams also buying in.

Vilhelm Hahn-Petersen, a partner at CataCap, told unquote" the GP will own slightly more than half of the business, with part of GSV's management converting stakes in the pre-merger company into an 8-9% share of the newco. Danica and Access will hold the balance.

Hahn-Petersen added there had been broad interest in co-investing among the LP base, with Access and Danica the quickest to act. He said the co-investors had been brought on board because of the size of the deal – which is CataCap's largest so far – and to secure capital reserves for organic growth and acquisitions during the investment's lifespan.

Hahn-Petersen said CataCap arranged the buyout of GSV by directly approaching the company's management, while Pitzner had been put up for sale by Axel Pitzner Fonden in a process led by Deloitte Corporate Finance.

Since its inception in 2012, CataCap had been looking to invest in the Danish equipment rental sector and had several conversations with players in the industry ahead of the buyout.

Hahn-Petersen considers the sector to be fragmented – pointing to former market leader Loxam's 11% market share as an example – with good opportunities for consolidation, which had otherwise generally been halted by the financial crisis.

The GP has set aside more than DKK 100m for consolidation through fleet, equipment and depot expansions. Hahn-Petersen also said acquisitions of regional and category-specific companies would be considered.

CataCap aims to grow the company at a 5-10% rate, hoping to increase the company's revenues from a current DKK 600m to more than DKK 1bn in the next five to six years. The GP also expects the business to benefit from a predicted boom in the Danish construction sector over the next decade.

Hahn-Petersen said GSV is primarily a Danish investment, but that the GP will be keeping an eye on opportunities for international expansion, primarily in Sweden.

The buyout was at the top-end of CataCap's range, according to Hahn-Petersen, who said the GP has a good pipeline of deals for 2015 and expects to complete at least one more by the end of the year. CataCap expects to make seven or eight investments from its first fund.

Debt
The deal was financed by a debt package including credit facilities provided by Jyske Bank, with leverage well above 50%.

CataCap said the asset-heavy nature of GSV had helped secure very favourable terms on the financing package, compared to current market conditions.

Company
The pre-merger GSV Materieludlejning was founded in 1964 and based in Ishøj, west of Copenhagen. Pitzner Material came from a merger of VMC Pitzner, AGJ Pitzner and Corona Pitzner, all owned by Axel Pitzner Fonden.

Post-merger, GSV will have 250 employees and a revenue of nearly DKK 600m and DKK 160m in operating profits.

People
Vilhelm Hahn-Petersen is a partner at CataCap. Ole and Søren Preston Andersen are the vendors of GSV Materieludlejning.

Following the deal, the GP will make Carsten Knudsen – who notably worked at Maersk, ISS and Esko – head of the new company's board. Dan Protin, current CEO of GSV, will continue as chief executive of the merged company.

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• Topics
• Nordics
• Industrials
• Buyouts
• Denmark
• Deloitte
• Mid-market buyout
• CataCap
• Unq2015June