Information on the Target

Hydro International, also known as Hydro, is a prominent global provider of crucial technological solutions in the domain of wastewater, stormwater, and industrial process water management. The company specializes in enhancing the control, storage, and quality management of water resources, thereby assisting municipalities and businesses in optimizing their water management processes. With over 60 years of expertise, Hydro has developed a robust portfolio of advanced technologies, holding over 125 patents, particularly emphasizing smart data capabilities in recent years. This technological prowess enables Hydro to significantly improve operational performance and minimize environmental impact.

Industry Overview in the Target’s Specific Country

The water management industry in the United Kingdom is undergoing a transformative phase, driven by increasing regulatory demands and a strong emphasis on sustainability. As climate change effects intensify, the need for efficient water management solutions has become paramount. Industry stakeholders are now more focused on innovative technologies that offer enhanced data analytics and integrated system solutions.

Additionally, the government is pushing for more stringent water quality standards, compelling companies in the sector to invest in advanced treatment and monitoring technologies. This regulatory landscape creates unique opportunities for companies like Hydro, which positions itself as a leader in delivering high-quality, efficient water management solutions.

Furthermore, with growing urbanization, the demand for effective stormwater management is on the rise. As towns and cities expand, traditional water management practices are becoming inadequate, leading to the demand for innovative solutions that can handle increasing volumes. Hydro's technological capabilities enable it to meet these challenges head-on, reinforcing its strategic positioning in the market.

Finally, the emergence of smart city initiatives is further disrupting the industry, as municipalities seek integrated solutions for water management that leverage IoT and advanced analytics. Companies, including Hydro, that focus on developing smart data solutions will likely benefit from this trend and continue to capture market share.

The Rationale Behind the Deal

The sale of Hydro International to Oldcastle Infrastructure, a subsidiary of CRH Company, represents a strategic move to leverage Hydro's innovative capabilities while fostering growth opportunities. Agilitas, having successfully supported Hydro's growth since the buyout in 2018, saw the potential for Hydro to benefit from Oldcastle's extensive resources and established market presence.

This deal enables Hydro to further enhance its product offerings and market reach. Oldcastle's infrastructure and construction portfolio provides a complementary fit that can catalyze Hydro’s expansion into new territories and sectors, ensuring that both parties achieve their long-term growth objectives.

Information About the Investor

Agilitas is a pan-European private equity firm focused on the mid-market sector. With a wealth of experience and a strategic approach to investing, Agilitas specializes in backing companies that exhibit considerable growth potential. Its deep understanding of operational enhancements and market dynamics enables the firm to work closely with portfolio companies, like Hydro, to unlock value and drive sustainable improvements.

Having invested in Hydro International since February 2018, Agilitas has facilitated significant advancements in the company’s customer base, product offerings, and geographical footprint. The firm's expertise has been instrumental in Hydro's strategic development, ensuring that the company is well-positioned for future growth and success in the evolving water management landscape.

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The investment in Hydro International by Agilitas, culminating in its sale to Oldcastle Infrastructure, represents a judicious decision backed by thorough market analysis and strategic foresight. Given Hydro's rapid growth trajectory and its significant contributions to the water management sector, this deal appears to be a strong investment.

Hydro's proven ability to innovate and expand its market presence positions it favorably in a sector that is only expected to grow due to increasing environmental concerns and urbanization trends. The acquisition by Oldcastle provides Hydro with the necessary resources to scale its operations and introduce new, innovative products to the market.

Moreover, the strategic fit between Hydro and Oldcastle signifies a promising future, enhancing the competitive advantage of both organizations. The potential for synergy between the two companies could result in enhanced service offerings and market penetration, illustrating the deal's potential for long-term value creation.

In conclusion, Agilitas’s support during Hydro’s growth phase and the subsequent sale to a well-established player reflect a sound investment decision. As Hydro continues to capitalize on emerging opportunities within the water management space, stakeholders can anticipate sustained growth, affirming the attractiveness of this investment in retrospect and prospectively.

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