EQT prepares next exit after €4.75bn fund close

As the firm toasts one of the biggest European final fund closes since the collapse of Lehman Brothers, EQT is hard at work planning its next exit: the sale of Danish business KMD.

Northern European buyout firm EQT is preparing to sell Danish IT company KMD, according to sources close to the process. If successful, it will be the firm’s seventh exit this year. 

EQT acquired KMD in March 2009 using capital from EQT V. It paid DKK 2 billion (€269 million; $341 million) for the company, with Danish pension fund ATP co-investing.

Against a backdrop of successful realisations which include Finnish technology group VTI, ISS, CaridianBCT, Kabel BW, Cimbria and Securitas, the firm held a final close for its latest buyout fund, EQT VI, last week on its hard-cap of €4.75 billion. 

The fundraising took less than nine months, and demand greatly exceeded the eventual amount raised, the firm said.

Christian Sinding, head of equity at EQT, attributed the fundraising success to the firm’s “proven industrial model for developing and growing companies”.

The firm attempted to broaden its investor base for EQT VI, with 23 percent of LPs in the fund coming from the Asia Pacific region, compared to 7 percent for EQT V. Middle Eastern LPs provided 5 percent of the committed capital, with North American investors committing 22 percent. 

Investors in the fund included Adams Street Partners, AP4, AP6, Argentum, ATP PEP, Capital Dynamics, CNP Assurances, Danica Pension, GIC, HarbourVest, Hermes GPE, Howard Hughes Medical Institute, Ilmarinen, IL TRS, Makena Capital, Nordea Bank, New York Life Capital Partners, Ontario Teachers' Pension Plan, Pantheon, Partners Group, Quentin Ayers, Sampo, San Diego County Employees Retirement Association, Skandia Liv, SUVA, Varma and Unigestion, the firm said. 

Capital from the fund has already been put to work: in July the firm acquired medical technology group Atos Medical for about €300 million.

EQT agreed the sale this week of support services group ISS. EQT and co-owner Goldman Sachs will sell the Danish company, which provides cleaning, security and catering services, to UK-based group G4S for £5.2 billion. EQT will retain a stake of about 11 percent in the newly-combined group following the sale, according to a spokesman. The deal is subject to G4S shareholder approval.