WET News

Private equity group closes in on Imtech UK • Leeds-based Endless LLP favourite to take over UK division of Dutch engineering services group. Maureen Gaines reports. I t has been a case of busi- ness as usual for Imtech UK in the past month – well, as much as it can be when your parent group collapses and is declared bankrupt. But the business has tried to keep going, despite the added uncertainty over its future. In fact by the time you read this, Imtech UK's future should have been decided. As WET News was going to press private equity firm Endless LLP was the hot favourite to take over the UK division of Dutch engineering services group Royal Imtech. The group's financial problems first appeared back in February 2013 when it a announced a 100M euros depreciation as a result of problems concerning a project in Poland, where Imtech Germany was the general contractor. In a report to shareholders a few months later Imtech alleged fraud in Poland and Germany. Protection Royal Imtech said discussions on long-term structural solutions and an amendment to the financing arrangements, including an increase in liquidity headroom for the group and its subsidiaries had not led to an agreement. In a statement it said: "Further discussions with the financiers were held over the last day. Although these discussions have not (yet) resulted in any agreement of additional financing for Royal Imtech or any of its subsidiaries." It continued: "Royal Imtech and Imtech Germany are evaluating the current situation and its consequences and are considering all options." Imtech Germany filed for insolvency on August 6, with Royal Imtech seeking protection from its creditors just days later. The group had tried to reach agreement with lenders for additional funding but was unable to do so. Dependent According to USP Marketing Consultancy, the fallout from Royal Imtech's collapse threatens 500 businesses in the Netherlands with around 100 fearing for their survival. USP said a quarter of the companies were dependent on Royal Imtech for a large part of their turnover. As soon as Royal Imtech was declared bankrupt on August 13 by the Rotterdam District Court, Imtech UK was quick to distance itself from the situation by emphasising it was continuing to trade independently and with its management team remaining in control. Its situation attracted the attention of several potential suitors, rumoured to include Laing O'Rourke and Brookfield. Of course, Laing O'Rourke is no stranger to Imtech – it has for years been a joint venture partner with Imtech Water, Waste & Energy working on a variety of major contracts in the water sector. A match made in heaven? Quite possibly but Endless was close to buying Imtech's Ireland operations, and was "also interested in the activities of Imtech UK", according to Royal Imtech trustee Jeroen Princen. So who is Endless? The Leeds-based company describes itself as a transformational private equity investor with immediate access of up to £80M for each investment. It has one distinct goal: to make business better for everybody. "It's why we get out of bed in the morning; why we do what we do; and why we consider ourselves unique from other investment houses. "We consider the real value of our investments to be the difference we make to businesses, communities and individuals. "A transformational investor, Endless looks to support buyouts, non-core acquisitions from larger groups, turnarounds and financial restructurings. All of these can carry with them feelings of confusion, concern and a level of unpredictability." Contracts With offices in London and Manchester as well, Endless says its focus is on businesses that have UK headquarters and turnovers of between £10M and £1bn. Imtech UK fits into that criteria. Its turnover in 2014 was £460M, although it did make a £1.5M loss as a result of News+ SEPTEMBER 2015 WET NEWS 7 several loss-making contracts. The UK operation covers a wide range of businesses including airports, systems integration, low carbon solutions, rail and engineering services. Growth There is also Imtech Water, Waste & Energy, which accounts for around a quarter of Imtech UK's turnover, according to The Leaders, our annual guide to the leading contractors that service the UK water sector. In AMP6 the business has secured operations with water companies including Severn Trent Water, Southern Water and United Utilities, mainly in joint ventures. The business expects to grow between 50 and 70% over the next five years from where it is now, and across its three core sectors. Imtech UK has been trading as normal under the sole control of its management since the collapse of its Dutch parent TIMELINE August 6: Imtech Germany files for insolvency August 10: Royal Imtech announces that negotiations with financiers have not resulted in additional funding August 11: Royal Imtech requests protection from creditors. Administrators appointed August 13: Royal Imtech declared bankrupt by Rotterdam District Court. Imtech Capital BV, Imtech BV and Imtech Group BV also declared bankrupt August 13: Trustees begin selling off Royal Imtech divisions "It's why we get out of bed in the morning; why we do what we do; and why we consider ourselves unique from other investment houses" Endless

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