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Leading company in water supply services through the HORECA channel

Incorporation of AGUAVIVA into an international build-up project in the water supply services sector. THE VECTOR COMPANY advised AGUAVIVA on the operation

General Overview

AGUAVIVA is a Spanish company that provides water services to companies, mainly through the HORECA channel. The company provides onesources water and ancillary equipment (bottles,…) within a service contract that includes the maintenance of the water sources.

The company had become the Spanish leading company within a market segment to be exploited (the HORECA channel) and it had also become a reference by developing a service tailored to the needs of this type of client and achieving reference clients.

Strategic Rationale

WATERLOGIC is an Irish company specialized in the manufacture of water filtering and cooling sources (onesource water).

The company partnered with a German private equity fund (CASTIK CAPITAL) for the execution of an international build-up project aiming to acquire different companies, in different countries, related to the manufacturing of water filtering and/or cooling sources and to the distribution of this kind of products.

The Spanish sector was very fragmented, highlighting  one company for its different view on the market and its leadership in one of the growing segments in Spain, such as the HORECA channel. This company was AGUAVIVA.

Key learnings

In these types of projects, the leading entrepreneur of the selling company is required to reinvest part of the company’s value in the new project. For this purpose, it is necessary to carry out a detailed analysis of the potential growth or the build-up of the project to value the future upside and the profitability captured after the group’s disinvestment, the value creation through DCF, the leverage effect, the exit multiple, the analysis of different scenarios,…).

In growing companies, it is important to quantify and capture the “run rate“ value or the annualization of new clients/contracts that had not contributed to the EBITDA (base for the valuation) at the time of closing of the transaction.

In these types of transactions, during the due diligence process, it is particularly important to work on all the business information necessary to define the integration plan and the synergies to be captured after the integration of the company into the group.