Advent International is exploring a stake sale in Rubix Group Holdings Ltd., a European provider of maintenance and repair services for industrial companies, to help fund a takeover of smaller Dutch rival Eriks NV, according to people familiar with the matter.
(Bloomberg) — Advent International is exploring a stake sale in Rubix Group Holdings Ltd., a European provider of maintenance and repair services for industrial companies, to help fund a takeover of smaller Dutch rival Eriks NV, according to people familiar with the matter.
Advent is seeking a private equity firm to help buy and co-own a merged Rubix-Eriks entity, said the people, who asked not to be identified because the discussions are private. SHV Holdings, a family-owned investment firm in the Netherlands, is currently preparing a sale of Eriks, the people said.
Boston-based Advent aims to further consolidate the fragmented European industrial services space. London-based Rubix is itself the product of a merger some six years ago between Advent’s Brammer and IPH of France.
Advent in 2021 explored taking Rubix public to raise €850 million ($938 million), but scrapped a planned London listing, citing adverse market conditions. If the firm succeeds in combining Rubix and Eriks, it could revisit an IPO of the new entity as soon as next year, the people said.
A stake sale in Rubix could value the whole business at about £4 billion ($5 billion), they said. Considerations are in the early stages and a final decision hasn’t been made. Eriks is set to attract competing offers and could fetch up to €1 billion, one of the people said.
Barclays Plc and Goldman Sachs Group Inc. are offering financing to potential buyers to help fund an investment in Rubix, which could result in co-control or a majority stake sale, according to people familiar with the matter. So-called staple financing can make an asset more attractive because it provides funding certainty.
The all-senior staple financing totals about €1.7 billion of funded debt, equating to about 4.7 times leverage based on Rubix’s estimated earnings before interest, taxes, depreciation and amortization of about €365 million. The overall debt package may be slightly higher when taking into account unfunded facilities.
Representatives for Advent, Rubix and Goldman declined to comment. SHV, Eriks and Barclays didn’t immediately respond to requests for comment.
A sale would mark another bright spot for industrial takeovers in Europe, which are significantly down this year as higher interest rates make deal financing more difficult. Carrier Global Corp., the US maker of air conditioners, on Tuesday agreed to buy most of German family-owned manufacturing company Viessmann for €12 billion.Â
Rubix says it’s Europe’s largest supplier of industrial maintenance, repair and overhaul products and services, with 2022 sales of €3 billion and operations in 22 countries.Â
Eriks has more than 5,000 employees in 15 countries with sales of €1.25 billion, according to its website.Â
SHV owns companies in sectors including energy distribution, cash-and-carry wholesale, transport activities and animal nutrition.
(Updates with staple financing from sixth paragraph.)
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