Charterhouse Capital Partners said on Monday it had agreed to sell its stake in environmental consultancy Environmental Resources Management (ERM) to the private equity investment arm of the Ontario Municipal Employees Retirement System (OMERS) for an enterprise value of US$1.7 billion.
U.K. private equity firm Charterhouse had bought a 55 percent stake in the London-based company in 2011, at which time ERM, which operates from 163 offices in 42 countries and employs more than 4,800 people, was valued at US$950 million, it said in a statement.
The rest of ERM is owned by partners in the business.
“Under its ownership, sales and EBITDA (earnings before interest, tax, depreciation and amortisation) have increased substantially, while the number of partners … has grown by more than 35 per cent,” Charterhouse said.
“Charterhouse has supported ERM’s management team, led by chief executive John Alexander, in a series of acquisitions, and overseen a period of substantial organic growth.”
While further financial details were not disclosed in the statement, a source familiar with the matter said the sale meant investors had made a 2.4 times multiple in cash on capital contributed (MoC).
Under Charterhouse’s ownership, ERM had seen revenue increase 40 percent and EBITDA rise by more than 55 percent, the source said, helped by six acquisitions during the period.
Charterhouse looks for western European deals in a range between 250 million euros (US$281 million) and 2 billion and has so far completed over 140 transactions worth an aggregate value of over 50 billion euros, it said.
The ERM deal is the fifth exit from Charterhouse’s CCP IX fund, after sales of its stakes in Card Factory, Deb Group, Wood Mackenzie and Bureau Van Dijk, which have collectively returned investors 3 times MoC, the source said.
Update: In a statement, OMERS said the Alberta Investment Management Corporation (AIMCo) will co-invest in the acquisition of ERM. Additionally, the deal will see 600 partners in ERM including senior management make a substantial re-investment into the company alongside OMERS and AIMCo.
OMERS and AIMCo said they are prepared to support management to develop the business, both organically by increasing market share through offering innovative new services in expanding global markets, and also by strategic acquisitions.
(Reporting by Simon Jessop and Freya Berry; Editing by David Holmes)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Reuters