Navis poised for 6x return on TES-Envirocorp
Navis Capital Partners is set to generate a 6x return on its investment in Singapore-based TES-Enivrocorp, following an agreement to sell the environmental services provider to Korea’s SK Ecoplant at a valuation of USD 1bn.
SK Ecoplant, a global leader in environmental engineering with operations in 19 countries, will acquire 100% of the company from Navis and unnamed minority investors. The transaction is expected to close in the second quarter this year, delivering Navis an IRR of 22%.
The private equity firm took control of TES in 2013, investing USD 100m for a 65% stake, representing a valuation of about 7x EBITDA for the prior fiscal year. At the time, TES' operations were limited to consumer electronics waste management and recycling.
The company is now positioned as a comprehensive battery lifecycle services provider and a one-stop-shop for recycling, repurposing, and reusing IT devices and electric vehicle (EV) batteries. It was an early mover in servicing EV lithium-ion batteries, having leveraged its experience with similar materials in handphones and laptops.
TES also has capacities in areas such as data centre services, commercial energy storage, and onsite-data destruction. Operations encompass 43 facilities in 21 countries across Asia, North America, and Europe. The customer base includes IT companies, hyperscale cloud providers, multinational corporations, and EV manufacturers.
Navis said value-add work during the holding period included support strengthening IT recycling capabilities through investment in new plants and the establishment of a dedicated compliance and risk function. It also guided several strategic acquisitions, reduced the cash-to-cash cycle from 30 days to two days, and embedded a full-time chief information officer to oversee a technology upgrade.
“Under Navis’ stewardship, TES has grown to become an industry leader with an excellent management team, incorporated strong operational processes which have raised the bar for ESG [environmental, social, and governance] compliance across the industry worldwide, and built a global network of facilities to serve its blue-chip clients,” Jean-Christophe Marti, a senior partner at Navis, said in a statement.
“TES is also ideally positioned to be a key player in the upcoming global energy transition.”
Navis’ experience in environmental services includes the acquisition of Singapore's ECO Special Waste Management in 2007 for an undisclosed sum. ECO was sold for SGD 246m (USD 183m) in 2015 to Beijing Capital Group, which cited an interest in toxic waste disposal. Navis’ key contribution to the company was in shifting its focus from general waste to industrial and hazardous materials.
The private equity firm closed its eighth regional fund at USD 900m last year, while also securing USD 450m for a continuation vehicle that features five companies from its sixth fund. TES is one of those companies.
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