Navis sells Asia inspection business to CDPQ

The size of the deal was not disclosed, but Bloomberg reported that CDPQ is investing around $250 million.

With the founder and majority shareholder in Qima, Sebastien Breteau, keen to retain control, Navis deliberately only invited financial sponsors to enter the bidding. Participants were asked to demonstrate what value they could bring as the business steps up to the next level.

This is the GP's second exit in the past six months, with both assets going to financial sponsors. The other transaction, announced in July, saw Amazon Papyrus Chemicals Holdings sold to The Longreach Group. In that instance, Navis had control, but strategic investors did not mount an aggressive pursuit, partly because travel restrictions limited access for due diligence.

Rodney Muse, a co-founder and managing partner at Navis, recently told AVCJ there is no shortage of prospective financial buyers. Muse noted that “private equity has money burning a hole in its pocket,” with Navis currently receiving far more inbound inquiries from financial sponsors than from strategic investors.

Qima was founded in Hong Kong in 2005 as AsiaInspection. The name changed in 2019 to reflect a broadening of the company’s services as well as its ambition to expand beyond Asia. Navis acquired a 40% stake in 2017 from passive financial investors, the founder, and his management team.

Assuming joint control, the private equity firm helped Qima make eight bolt-on acquisitions with another four in process. The company is now active in 88 countries, offering TIC and audit services in the consumer goods, food, and life sciences verticals.

The company also moved its existing and acquired operations onto a single digital platform, reducing costs and improving margins. The software-as-a-service offering enables clients to oversee procurement and compliance online.

During the holding period, Qima delivered compound annual revenue growth of 32% and expanded EBITDA by 26%. EBITDA continued to rise during COVID-19 despite severe disruptions to global supply chains.

“We were fully convinced that Qima’s tech-enabled approach to TIC services provided a material competitive advantage versus others in the industry. This proved to be the case, and the management team has delivered on every dimension that was expected of them,” said Nicholas Bloy, co-founder and managing partner of Navis, in a statement.

The private equity firm is currently deploying its eighth regional fund, which closed on $900 million at the end of July. At the same time, a consortium led by NewQuest Capital Partners supported a $450 million continuation vehicle for five companies from Fund VI.

J.P. Morgan served as the exclusive financial advisor to Navis and Qima on the exit to CDPQ.

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• Topics
• Southeast Asia
• Greater China
• Support services
• Trade sale
• Hong Kong (China)
• Asia
• Caisse de depot et placement du Quebec (CDPQ)
• Navis Management
• professional services