Montagu lays down Danish pipe deal

European mid-market private equity firm Montagu Private Equity has agreed to acquire Danish pre-insulated pipes manufacturer Logstor from a consortium of financial investors.
 
Montagu Private Equity declined to disclose the transaction value, but a source close to the deal put the price at between €300 million and €400 million ($377 million to $504 million).
 
The acquisition will provide an exit for Logstor’s Danish investors Axcel, Polaris Private Equity and FIH. Logstor’s management will retain a minority stake in the business.

Bech Brun of Denmark provided legal advice for Montagu Private Equity on the transaction, while PricewaterhouseCoopers provided financial advice.
 
Axcel led the original DKR120 million (€16 million; $20.2 million) acquisition of a 90 percent stake in Logstor Ror in January 1999 from the Andersen family, the company’s then majority shareholder.
 
Peter Dahlberg, investment manager at Montagu Private Equity, said that the investment was made from the firm’s latest fund, Montagu III, which closed with €2.26 billion of commitments in July 2005. In April, Montagu paid £182 million to acquire UK finance software provider Misys General Insurance. Last December, German-based wound care specialist BSN Medical was purchased in a €1.03 billion transaction.
 
Dahlberg told PEO that Montagu Private Equity was attracted to Logstor’s growth potential. “Last year, Logstor merged with its largest competitor, which fundamentally changed the prospects for the company. At the same time, high energy prices have put energy efficient and environmentally-friendly solutions on the agenda,” he said.
 
“District heating is especially big in the Nordic region, a number of countries in mainland Europe as well as Eastern Europe and Russia, where it often is the main heating supply. Many of those systems have not been maintained, so there is a huge need for replacement.”
 
Headquartered in Logstor, Denmark, Logstor manufactures pre-insulated pipe systems for the transportation of gases and liquids to the district heating and cooling, oil and gas, marine and industrial sectors.
 
Logstor, formed through the merger of Logstor Ror and Alstom Power FlowSystems in August 2005, has 1,300 employees in eight European production facilities and 11 sales offices, as well as joint ventures in Korea and China. The company has sales of €250 million and EBITDA of more than €25 million, according to Montagu Private Equity.