Target Information

TowerBrook Delta ("Delta" or "the fund"), an SFDR Article 9 Impact Fund of the transatlantic investment firm TowerBrook Capital Partners, has announced its fifth platform investment in Axil, a UK-based resource management company specializing in innovative waste reduction, recycling, and resource recovery solutions. Founded with a vision to address the growing challenges of waste management and environmental sustainability, Axil’s business model focuses on maximizing the recycling and reuse of manufacturing and industrial waste, thereby conserving natural resources and minimizing emissions and pollution resulting from waste disposal.

Axil aims to support the transition towards a circular economy, striving to reduce carbon emissions while generating positive environmental outcomes. This goal closely aligns with Delta's Resource Sustainability investment pillar and several United Nations Sustainable Development Goals (UNSDGs), specifically Goals 9, 11, and 12.

Industry Overview

The waste management and resource recovery industry in Europe is undergoing significant transformation due to increasing resource scarcity, rising raw material costs, and stringent regulatory standards. With growing public and governmental concern over environmental issues, effective waste management and recycling practices have become crucial to gain resource sovereignty. In recent years, stricter regulations and escalating disposal costs have intensified the pressure on businesses to adopt sustainable resource management practices.

As businesses navigate these challenges, the demand for innovative waste management solutions has surged. Companies like Axil play a critical role in this shift, offering services that not only improve recycling rates but also reduce operational costs for businesses. By focusing on solutions that address waste reduction at the source, Axil is positioned to meet the evolving needs of industries focused on sustainability and profitability.

In this environment, the push for resource sustainability is not just an option but a necessity. European businesses are increasingly recognizing the benefits of investing in waste management technologies to enhance efficiency, reduce environmental footprints, and improve their overall sustainability profile. Therefore, firms that provide effective, innovative resource management solutions are in a strong position to capture growing market opportunities.

Furthermore, the European market is seeing an increase in initiatives aimed at promoting circular economies, with countries implementing policies that encourage resource recovery and recycling. This context creates a fertile ground for Axil’s business model and aligns with broader economic trends aimed at sustainable development.

Rationale Behind the Deal

The investment in Axil by TowerBrook Delta is strategically aligned with the fund's focus on resource sustainability, coinciding with the portfolio's momentum and success. With a 43% compound annual growth rate (CAGR) in revenue over four years and an impressive 70% year-over-year EBITDA growth, Axil exemplifies the high-growth potential seen across other investments in Delta’s portfolio.

This investment offers an opportune moment to support innovative solutions that can enhance sustainability within supply chains and contribute positively to environmental stewardship. The growth profile of Axil indicates not only an alignment with Delta's investment strategy but also positions the fund to benefit from rising market demand for sustainable technologies.

Information About the Investor

TowerBrook Capital Partners is a premier transatlantic investment firm with offices in London and New York, specializing in making strategic investments across various sectors. With a strong focus on impact investing, TowerBrook is dedicated to identifying high-potential opportunities that offer sustainable financial and societal returns. The firm operates multiple funds, including Delta, aimed at fostering environmental sustainability while generating strong returns for investors.

Since its inception, TowerBrook has established itself within the investment community as a leader in promoting innovative solutions that address pressing global challenges. The firm’s strategic focus on growth sectors, along with its expertise in operational improvements, allows it to collaborate effectively with portfolio companies, fostering their expansion and development.

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The investment in Axil appears to be a compelling opportunity for TowerBrook Delta, aligning perfectly with both market trends and the fund’s strategic focus on resource sustainability. Given Axil's strong growth metrics and alignment with sustainability goals, it reinforces the potential for significant returns while also contributing positively to environmental outcomes.

Such investments are particularly pertinent in today’s economic climate, where sustainability is becoming paramount to business success. With expected regulatory tightening and consumer preference shifts towards environmentally friendly practices, companies like Axil are well-positioned for growth. The fact that Axil already showcases a remarkable revenue CAGR and growing EBITDA indicates its robust operational model and market fit.

Moreover, the synergies projected from TowerBrook’s expertise could enhance Axil’s ability to capitalize on rapid market changes, ensuring the firm stays ahead of the competition as demand for resource management solutions escalates. By strategically supporting Axil's growth, TowerBrook not only enriches its portfolio but also contributes to broader environmental goals.

In summary, TowerBrook Delta's latest investment in Axil is a sound decision, likely to yield positive returns backed by strong growth potential, underlining a successful venture that emphasizes sustainability while driving profitability.

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