The nuclear industry might not look like an obvious source of private equity deals at the moment. Two years after the Fukushima crisis, many governments remain dubious about nuclear power, while some have cancelled plans to build new capacity altogether. Regulation and taxation are still subject to fast-changing political winds.
Yet some managers seem unfazed by these concerns. Take Paris-based Astorg Partners. The mid-market firm had been looking into the nuclear industry for more than three years, after an unsuccessful bid for radiation detection business Mirion Technologies. In March, it sealed its first deal in the sector by acquiring Canberra, the measurement subsidiary of French nuclear giant AREVA, in a transaction understood to be worth roughly €300 million.
“We’d been following Canberra for more than a year, and submitted an unsolicited bid to AREVA in early 2012 – so when the group finally decided to sell the business, we already knew it very well,” says Joel Lacourte, a partner at Astorg. And there was a lot to like, he explains: as an international business-to-business company, with a leadership position across more than 50 percent of its revenues, Canberra ticks many of Astor’s favourite boxes.
Most importantly, however, says Lacourte, the company is surfing a very promising trend within the nuclear industry. “The nuclear sector as a whole is growing at three to four percent, which in itself is not that great. But there are some niches within it, including anything linked to increasing safety, which are now growing very fast.”
This, he says, is due to a government-led surge in new safety requirements. That’s partly a response to the sector’s recent woes (Canberra has grown 20 percent since the Fukushima crisis, for example). But there’s also a more general need to upgrade the developed world’s ageing facilities – which is proving a resilient source of growth for nuclear-related services. “There are a lot of sites where bringing safety up to modern standards will require new investment, whether we like it or not.”