Kohlberg Kravis Roberts and CVC Capital Partners are preparing to sell Van Gansewinkel Group, a Dutch waste management business, according to a source familiar with the matter. The firms have hired Credit Suisse to run the sales process, the source said.
CVC and KKR bought Eindhoven-based Van Gansewinkel in 2007 and merged it with AVR, a Rotterdam-based waste management business that it had acquired for €1.4 billion in March 2006. The combined acquisition price of two businesses was €2.2 billion. Last year, KKR and CVC sold AVR for €944 million, which was used to reduce AVR’s debt down to €680 million.
It is unclear what the enterprise value of Van Gansewinkel will be. A report in Dutch business paper Het Financieele Dagblad quoted unnamed M&A experts as suggesting that the company is unlikely to be worth more than the value of its debt. However, a source close to the deal said this conclusion was premature, since the sales process was still at a very early stage.
Both CVC and KKR declined to comment, but a source close to the matter said Van Gansewinkel, whose revenues are approximately €1 billion, has “no debt maturity issues and a strong liquidity position”.
Van Gansewinkel collects waste of more than 100,000 companies and 2.0 million households. It now operates in The Netherlands, Belgium, Luxembourg, Germany, France, Portugal, Czech Republic, Poland and Hungary. During the ownership period of the two buyout firms, the company invested €900 million in capital expenditure. For the €95 million add-on acquisition of Veolia in Belgium, KKR and CVC provided extra funding, it is understood.
Van Gansewinkel also developed its recycling capabilities. In 2013, more than 93 percent of processed waste was given a second life: 62 percent as raw material and 30 percent as (green) energy, it is understood.
KKR invested in the business using capital from its KKR European Fund II, a €4.5 billion, a 2005-vintage and its KKR European Fund, a $3.10 billion 1999-vintage.
The firm will be keen to return capital to investors as it is currently in market to raise its next European fund, KKR European Fund IV. The Washington State Investment Board made an investment recommendation to that vehicle during a board meeting in June, according to a filing on the pension fund’s website. The precise target of the fund was undisclosed.