Ratos Appoints Advisors for Sale of Anticimex

Swedish buyout shop Ratos has hired Navigo Partners to advise it on the sale of pest control firm Anticimex, Reuters reported Friday. A deal for Anticimex could be worth as much as 2.5 billion Swedish crowns ($364 million). Ratos bought its 85% stake in Anticimex from Nordic Capital in 2005 in a deal that valued the company at 1.6 billion crowns.

(Reuters) – Swedish private equity firm Ratos has appointed advisors to help sell pest control firm Anticimex, sources familiar with the matter told Reuters, in a deal that could be worth 2.5 billion Swedish crowns ($364 million).

Ratos has asked Navigo Partners to advise it on negotiations with a handful of potential bidders, including other local private equity firms, the sources said.

Four analysts contacted by Reuters valued Anticimex, which provides inspection services such as for pest control, hygiene assurance and fire protection, at an average 2.5 billion crowns.

Ratos bought its 85 percent stake in Anticimex from Nordic Capital in 2005 in a deal that valued the company at 1.6 billion crowns.

One of the sources said Bjorn Akerlund, the head of Navigo Partners, led the Handelsbanken corporate finance team who advised Nordic Capital on that deal. Bjorn Akerlund was not immediately available for comment.

Anticimex has seen sales and profits rise every year since then, even in 2009 when Sweden’s GDP dropped by more than 5 percent.

“Anticimex has really stable, steady topline growth, it is not cyclical and has strong cash flow creation,” one analyst said.

Navigo is an independent corporate finance firm with a team of nine based in Stockholm, according to its homepage.

DIAB SALE

Sources also said that Ratos several months ago appointed JP Morgan as financial advisor on a sale of another portfolio company, DIAB, but that a sales process had not yet started.

DIAB manufactures and develops materials for structures such as wind turbine blades, hulls and decks for leisure boats, as well as components for aircraft, trains and rockets.

Ratos and JP Morgan declined to comment.

DIAB has seen a severe profit decline this year, as Chinese authorities have cut building of new windmills on concerns about oversupply.

The Chinese windmill market is DIAB’s single largest customer segment. In total, the company derived around two thirds of its sales from the wind power industry in 2010. The Asia Pacific region accounted for more than half of its total sales.

The company is running a restructuring programme to cut costs and adapt to present sales volumes. Ratos CEO Arne Karlsson singled out DIAB as one of two “problem companies” in Ratos’ portfolio at the latest quarterly report.

Sources said a quick sale of DIAB was unlikely given its present difficulties and that Ratos would probably await a more stable situation for the firm before kicking off a sales process. DIAB is planning for a return to more normal levels of Chinese demand in the second half of 2012.

Ratos has 19 investments in the Nordics which had a turnover of 36 billion Swedish crowns ($5.2 billion) in 2010 and operating earnings of 2.8 billion.

Anticimex had earnings before interest, tax, depreciation and amortization (EBITDA) of 236 million crowns in 2010 on sales of 1.86 billion.

DIAB had EBITDA earnings of 275 million in 2010 on sales of 1.40 billion. But in the third quarter this year DIAB made an EBITDA loss, weighed by restructuring charges and a fall in reported sales by more than a fifth compared to the year ago period. ($1 = 6.8654 Swedish crowns) (Editing by Jon Loades-Carter)