Target Information

Agilitas Private Equity LLP ("Agilitas"), a prominent mid-market private equity firm in Europe, has reached an agreement to sell the Reconor Group ("Reconor" or "the Company") to a fund advised by Basalt Infrastructure Partners LLP ("Basalt"). Reconor is recognized as the leading environmental services provider in Denmark, specializing in helping clients adhere to the country’s rigorous standards for responsible and environmentally safe recycling, as well as assisting municipalities with waste collection.

Reconor is committed to minimizing waste generation through the principles of prevention, reduction, and reuse. The Company oversees the remediation of over 2.1 million tonnes of soil annually and manages the processing of over 0.8 million tonnes of primarily reusable waste. This involves the efficient operation of 230 trucks and the management of 31,000 containers throughout Denmark, with a significant emphasis on recycling materials for secondary usage.

Industry Overview in Denmark

Denmark's environmental services industry is one of the most advanced in Europe, driven by stringent regulations and an increasing public awareness of sustainability. The country has committed to ambitious environmental goals, including a target of becoming a circular economy by 2050, which necessitates robust waste management and recycling solutions. As a result, firms in the sector must innovate continually to meet evolving standards.

Investment in the waste management sector has surged due to heightened legal obligations for companies to manage waste responsibly. This has opened up opportunities for responsible and effective recycling operations that contribute to reduced landfill waste and increased recycling rates. Denmark's landscape is characterized by a growing emphasis on sustainable practices, which further underscores the importance of companies like Reconor that lead in environmental service provision.

Additionally, Denmark's government provides support and incentives to encourage advancements in green technology and sustainable business practices. This favorable regulatory environment fosters growth in the environmental services sector, making it a strategic focus for both local and international investors who are committed to sustainability.

The current market dynamics present a favorable climate for expansion and innovation in environmental services. Companies such as Reconor are at the forefront, effectively leveraging their expertise to position themselves as indispensable partners in achieving Denmark’s environmental milestones.

Rationale Behind the Deal

The decision to sell Reconor aligns with Agilitas's strategy to unlock value from its investments while facilitating Reconor's continued growth and expansion. The sale enables Basalt to leverage its expertise in infrastructure investments, particularly in environmental sectors, to enhance Reconor's operational capabilities and support its ongoing initiatives in sustainability.

Reconor’s innovative approach towards waste management and its execution of a successful transformation plan present significant growth opportunities. The strategic acquisitions that underpinned its expansion signify that Reconor is well-positioned to become a leader not only in Denmark but potentially in broader European markets.

Investor Information

Basalt Infrastructure Partners LLP is known for its commitment to infrastructure investments that promote sustainability and environmental responsibility. The firm focuses on essential services across various sectors, emerging as a trusted partner to key stakeholders in the infrastructure domain. Their investment strategy emphasizes operational efficiency and the emergence of sustainable practices within their portfolio companies.

By acquiring Reconor, Basalt aims to further its objectives of promoting environmentally friendly solutions while capitalizing on the growing demand for sustainable waste management services. Their vision aligns with the urgent need for improved recycling and waste mitigation practices, addressing both present environmental challenges and contributing to future sustainability goals.

View of Dealert

This transaction appears to be a prudent investment choice given the current market trajectory and Reconor's established position in the environmental services sector. Reconor's dedication to advancing circular economy principles and substantial operational achievements make it a valuable asset for Basalt, which is poised to offer strategic support to facilitate further growth.

The potential for Reconor to expand its footprint outside Denmark presents an exciting opportunity, as the demand for responsible waste management solutions continues to rise in various European markets. This aligns with broader industry trends towards sustainability, ensuring that Reconor is well-prepared to capture emerging growth opportunities.

Moreover, the strategic acquisitions that facilitated Reconor’s transformation underscore its capable management and proactive strategy, enhancing its competitive advantage in the market. With Basalt's expertise backing it, the company is in an ideal position to innovate and lead in the evolving landscape of environmental services.

Overall, this deal holds promise for both parties, as Reconor's sustainability mission aligns seamlessly with Basalt's investment strategy. The synergies involved in this arrangement suggest it could lead to significant long-term value creation, possibly making it an exemplary model within the sector.

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