Apax acquires Safetykleen from Warburg Pincus

Kenny Wastell
18 May 2017

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Apax Partners has agreed to acquire UK-based industrial cleaning business Safetykleen Europe from Warburg Pincus, bringing to an end a nine-year holding period for the vendor.

Financial details of the transaction remain undisclosed, though unquote" sister publication Mergermarket reported earlier this year that the business could be sold at up to 12x EBITDA, which was forecast to reach £75m in the 2017 financial year.

Ardian, HgCapital, Onex Partners and Montagu Private Equity were also reportedly in the running to acquire the company.

Under the vendor's tenure, the business has increased its headcount from 1,400 to 1,600, while EBITDA has grown from £63m to £75m over the past three years.

Safetykleen was attracting debt pitches in the 6.25x region in advance of the deal, with some as high as 7x through second lien, according to unquote" sister publication Debtwire.

The transaction is expected to close in Q3 2017.

A spokesperson for Apax declined to comment further on the deal, while unquote" was awaiting a reply from Warburg Pincus at the time of publication.

Previous funding
Safetykleen first received private equity backing in January 1999, when Epiris (then known as Electra Partners) acquired the company via a £126.6m MBO. In August 2000, the GP acquired the 44% stake that had been retained by original parent company Safety-Kleen Corporation for €38m, in a deal valuing the business at around €170m.

CCMP Capital Advisers (then part of JP Morgan) acquired Safetykleen from Epiris in July 2004 in a deal valued at £280m. CCMP span out from JP Morgan Partners in 2006 and managed the investment. Under CCMP's tenure, the business bolted on Malary Environmental Services in July 2006.

In April 2008, Warburg Pincus acquired a majority stake in Safetykleen from CCMP in a £565m deal.

Company
Founded in 1973 and headquartered in London, Safetykleen provides surface treatment, cleaning and chemical application services for businesses operating in the metalworking, transport, manufacturing and automotive spaces. The company has 18 offices across the UK and has operations in 14 countries, primarily in Europe, as well as Brazil, China and Turkey.

People
Apax Partners – Frank Ehmer (partner).
Warburg Pincus – Daniel Zilberman (head of Europe).
Safetykleen Europe – Philippe Mauguy (CEO).

Advisers
Equity – Allen & Overy (legal); PwC (tax, financial due diligence, IT due diligence); LEK Consulting (commercial due diligence).
Vendor – Goldman Sachs (corporate finance); Freshfields Bruckhaus Deringer (legal); EY (financial due diligence); Deloitte (tax); Eden McCallum (commercial due diligence).
Management – Proskauer Rose (legal).