Information on the Target

Waterjet Entreprenad AB is a leading provider of hydro demolition, concrete repair, and industrial maintenance services in Sweden. The company specializes in the repair and rehabilitation of concrete infrastructure, including bridges, parking decks, dams, and various other civil structures. Over fifty percent of Waterjet's revenue is derived from public sector clients, including rail and road authorities, while the remainder is generated from private sector clients such as parking facilities, pulp and paper mills, and major construction firms.

Established from the hydro demolition segment of the Swedish construction company NCC, Waterjet was acquired by Tomas Åberg in 1999, who has since expanded the business significantly. Waterjet is headquartered in Lidingö, near Stockholm, and operates regional offices in Karlstad and Skellefteå. The company employs advanced hydro demolition techniques, which utilize high-pressure water jets to effectively remove damaged concrete, proving to be superior to traditional mechanical removal methods.

Industry Overview

The concrete repair and rehabilitation industry in Sweden is characterized by a growing demand for maintenance of aging infrastructure. As urbanization continues and infrastructure ages, the need for specialized services such as hydro demolition is expected to rise. Government investments into infrastructure projects and categorical mandates for repair and durability serve to bolster the sector's growth prospects.

Moreover, the Nordic region's emphasis on sustainability and environmentally friendly approaches to construction and maintenance has placed services like hydro demolition at the forefront. The non-invasive nature of hydro demolition minimizes environmental impact and preserves the integrity of surrounding structures, making it a preferred choice for infrastructure rehabilitation.

The industry is also experiencing advancements in technology, with innovations in high-pressure water jetting equipment contributing to more efficient and effective concrete repair processes. As players like Waterjet utilize cutting-edge technology, they maintain a competitive edge in a rapidly evolving market.

Overall, the Swedish concrete repair sector is positioned for growth, driven by increasing investment, technological advancements, and the necessity for sustainable practices in infrastructure maintenance.

The Rationale Behind the Deal

The acquisition of Waterjet Entreprenad by Procuritas Capital Investors IV is strategically significant, as it enables PCI IV to tap into a niche market with strong growth potential. Waterjet's established reputation and expertise in hydro demolition create a solid foundation for expansion, particularly in the Nordic region where demand for infrastructure rehabilitation is on the rise.

PCI IV aims to leverage Waterjet's strong customer relationships and skilled workforce to explore both organic growth opportunities and potential acquisitions, thereby amplifying the company's market presence and operational capabilities.

Information About the Investor

Procuritas Capital Investors IV (PCI IV) is a private equity fund that primarily targets mid-sized companies within the Nordic region. With a strong focus on management buyouts, PCI IV seeks to partner with firms that exhibit substantial growth potential, particularly those with well-established market positions like Waterjet Entreprenad.

Procuritas, founded in 1986, is recognized for pioneering management buyouts in the Nordic market. Their expertise in financing and structuring buyouts, combined with a robust network within the industry, positions them well to support Waterjet's growth ambitions and strategic objectives.

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From an investment perspective, the acquisition of Waterjet Entreprenad by PCI IV appears to be an astute decision. The company's leadership in hydro demolition and its strong client base provide a solid foundation for future growth. With a pronounced increase in infrastructure investment, particularly in the Nordic region, the demand for Waterjet's specialized services is expected to rise.

Moreover, the partnership with PCI IV offers Waterjet access to vital resources and expertise that will facilitate geographic expansion and operational enhancements. The potential for both organic growth and strategic acquisitions under PCI IV's stewardship increases the likelihood of achieving significant market penetration.

However, it is essential to consider that the success of the investment will greatly depend on effectively executing expansion strategies while maintaining the quality of service that established Waterjet's leading position. The company's technology and maintenance capabilities will need to scale in accordance with growth plans.

In conclusion, this acquisition represents a promising investment opportunity with the potential for substantial returns, provided that growth strategies are executed thoughtfully and the core competencies of Waterjet are preserved and enhanced.

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