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Water treatment division of an industrial corporation

Divestment of the water treatment division of ISOLUX CORSAN due to strategic decision to sell the non-core business THE VECTOR COMPANY advised ISOLUX CORSAN on the transaction

General Overview

ISOLUX CORSÁN is a global leading company within the areas of concessions, energy, construction and industrial services, with more than 80 years of experience. The company develops its activity in 35 countries and in four continents.

The company decided strategically to leave some of its non-core business units aiming to generate cash that would be incorporated to the future plans of the company.

Strategic Rationale

TECVASA is a company specialized in the technical and administrative management of hydraulic infrastructure, which includes services of water supply, sanitation, wastewater treatment and irrigation systems.

This company, subsidiary of GRUPOTECH, aimed to grow within the water treatment division, as it was a sector with possibilities to reach a rapid growth through the inorganic route (due to the need to obtain a concession/licence,…) and as ISOLUX CORSAN’s business fitted due to its geographical complementarity and diversification.

Key learnings

The importance in some businesses or sectors of carrying out a technical due diligence over the rest of the areas to be reviewed during the due diligence process (financial, legal, tax, labour).

The special feature of the valuation of businesses related to administrative concessions (with a temporary horizon), and the effect of the maintenance and replacement capex to be assumed.

The management of a corporate client, with its established structures for decision-making and high-skilled teams used to these type of situations.