MADRID (Reuters) – European buyout firm EQT (NYSE:EQT) is working with advisers to prepare the sale of French water management firm Saur in a deal that could value France’s third-biggest water firm at about 3 billion euros ($3.43 billion), people familiar with the matter told Reuters.
EQT has hired Rothschild to sound out interest for its 70% stake in Saur ahead of an auction process that is expected to kick off later this year, one of the people said, speaking on condition of anonymity.
The company has already drawn interest from Munich-based family office Reimann Investors which operates on behalf of Germany’s billionaire Reimann family, this person said.
Cash-rich infrastructure investors are also expected to come forward for Saur which serves roughly 7,000 local authorities in France under long-term contracts that appeal to financial investors as they generate a stable cash flow, the people said.
Rothschild declined to comment. EQT and Reimann Investors did not respond immediately to a request for comment.
The move comes as French waste and water management giants Veolia and Suez are in the process of finalising a tie-up that would create a national champion.
For infrastructure funds water management is a lucrative industry, with EU countries spending an estimated 100 billion euros per year on water supply and sanitation, according to the Organisation for Economic Cooperation and Development (OECD).
Under EQT’s ownership Saur has invested in international growth with recent acquisitions in Portugal and the Netherlands.
It is also present in Spain where its local subsidiary Gestagua could be used as a possible platform to access South American markets, its Chief Executive Patrick Blethon told Spanish media on Feb. 7
EQT, which took control of Saur in 2018, is looking to cash out for about 3 billion euros and will target a wide range of financial investors as prospective buyers, the sources said.
Saur refinanced its debt in September when it issued sustainability-linked bonds worth 950 million euros and secured a senior revolving credit facility of 250 million euros.
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