PAI partners has granted exclusivity to a consortium led by Caisse des Dépôts et Consignations, a French investment group, as it looks to complete the lucrative €2.4 billion ($2.3 billion) sale of French utility Saur.
PAI is set for a substantial return on the business, after increasing profits by 25 percent in just two years.
Caisse des Dépôts has teamed up with fellow French investment group Axa Investment Managers and Saur’s trade rival Séché Environnement to make a “firm and irrevocable” offer of €1.72 billion for the entire share capital of the business.
Including debt, this would place an enterprise value of about €2.4 billion on the company, according to a source familiar with the deal.
PAI only bought the business just over two years ago, paying €980 million to acquire the company from Groupe Bouygues in February 2005.
Saur, a water and waste management business, has a 13 percent market share in France and a smaller presence in Spain. Since taking control, PAI has won a number of important new contracts for the water business, increased its waste storage capacity through extra landfill sites and accelerated the turnaround of Stereau, a division of the company that designs and builds water treatment plants.
As a result, PAI was able to boost Saur’s pre-tax profits by 24 percent in its last financial year, to €142 million. This leaves the French buyout firm in line for a substantial return from the sale, according to a market source.
The firms still need to consult the workers’ councils, who represent the company’s 12,000 employees and will need to express an opinion on the deal before it can go ahead.