EXCLUSIVE EQT prepares $3.4 billion sale of French water utility company Saur-sources

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Christian Sinding, CEO of Swedish private equity group EQT, poses for a picture at the company’s headquarters in Stockholm, Sweden June 24, 2019. Picture taken June 24, 2019. REUTERS/Esha Vaish/File Photo

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MADRID, Feb 8 (Reuters) – European buyout firm EQT (EQTAB.ST) is working with advisers to prepare the sale of French water management company Saur in a deal that could add value to the third largest French water company at around 3 billion euros ($3.43). billion), sources told Reuters.

EQT has hired Rothschild to sound out potential bidders for its 70% stake in Saur ahead of an auction process expected to start later this year, one of the sources said, speaking on condition of anonymity.

The Stockholm-listed investment firm, run by Christian Sinding, is looking to cash in around 3 billion euros after taking control of Saur in 2018 in a deal that saw BNP Paribas (BNPP.PA) retain a minority stake in the company, the sources said.

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Saur achieved net sales of 1.7 billion euros last year and operates in 20 countries, serving around 20 million people worldwide.

German utility company Rethmann Group is considering a possible bid for the Paris-based company as it seeks to expand its operations in France after buying a 34% stake in transport company Transdev from Veolia in 2019, said one of the sources.

Rethmann, which is active in water management through its Remondis unit, is expected to face competition from cash-rich infrastructure funds that consider the company’s cash flow stability and long-term contracts with approximately 9,500 local authorities and industrial customers as a safe bet.

EQT and Rethmann Group were unavailable for comment while Rothschild declined to comment.

The move comes as French waste and water management giants Veolia (VIE.PA) and Suez (SEVI.PA) are finalizing a merger that would create a national champion. Read more

For infrastructure funds, water management is a lucrative industry, with EU countries spending around €100 billion a year on water supply and sanitation, according to the Cooperation Organization and Economic Development (OECD).

Under EQT ownership, Saur expanded its business overseas with acquisitions in Portugal and the Netherlands.

The 89-year-old company also has a presence in Saudi Arabia, Britain and Poland as well as Spain where its local subsidiary Gestagua could be used as a possible platform to access South American markets, its director said. General Patrick Blethon to the Spanish media on February 2. seven.

Saur refinanced its debt in September by issuing sustainability bonds worth 950 million euros and obtaining a senior revolving credit facility of 250 million euros.

($1 = 0.8763 euros)

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Reporting by Andres Gonzalez and Pamela Barbaglia, Editing by Tomasz Janowski, David Evans and Andrea Ricci

Our standards: The Thomson Reuters Trust Principles.

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