Hanover Investors has completed the acquisition of AIM listed Hydro International, a storm water and waste water engineering business.
The business was bought for a total consideration of circa GBP29 million by the Hanover Active Equity Fund through a Scheme of Arrangement.
This is the first investment by the fund and fits into its strategy of private equity style involvement in listed entities, including take-privates.
The team at Hanover identified Hydro as a business constrained by the public markets, showing tangible value potential. Hydro operates in niche engineering segments of the storm water and waste water sectors which are growing quickly and are influenced positively by regulatory drivers. The US and Middle East markets, which contribute around 85 per cent of the company’s profits, offer significant growth opportunities.
The Hanover team, including a Hanover operating partner who joins as CEO, will work to expand Hydro's customer base and contracted revenues, to deliver growth, to expand geographies and to capture additional market share.
Matthew Peacock, founder and managing partner of Hanover, says: "As with our previous investments, we have identified intrinsic value in Hydro which the business was unable to unlock whilst listed. We bring to Hydro a combination of strategic, operational and business expertise in a sector we understand well."
