EQT Stands to Quadruple Its Money Through $1 Billion Innovyze Sale
February 24 2021 - 7:32AM
Dow Jones News
By Laura Kreutzer
The private-equity arm of Stockholm-based EQT AB has agreed to
sell U.S. water infrastructure company Innovyze to publicly traded
Autodesk Inc. in a $1 billion deal that people familiar with the
matter say stands to return more than four times EQT's initial
investment.
Innovyze offers software and technology that governments,
utilities, engineering firms and corporations use to manage water
and wastewater systems, drainage, distribution, flood modeling and
other services. The Portland, Ore.-based company serves some 6,500
clients across 60 countries, including the Los Angeles County
Public Works Department, New York City's Department of
Environmental Protection and Balfour Beatty PLC.
One of the people familiar with the deal said that Innovyze has
roughly tripled its annual revenue under EQT's ownership.
EQT created the water infrastructure business in 2017 through
the combination of two technology units it had acquired out of
larger corporations: XP Solutions and Innovyze. At the time, the
firm was attracted to what it saw as a relatively low level of
technology adoption among water utilities compared with other
industries such as healthcare or finance, according to partner
Arvindh Kumar, who joined EQT in early 2020 to lead the firm's U.S.
investments in technology, media and telecommunications.
"We thought that over a longer period of time it [would be] a
very attractive market where there would be growth and adoption of
technology solutions to help utilities," Mr. Kumar said.
In 2019, Innovyze acquired Emagin, a software provider that uses
artificial intelligence and machine learning to help utilities and
businesses better manage and operate water systems. That
acquisition expanded the software company's corporate client base
while also increasing its technology arsenal.
In recent years, climate change, heightened regulatory scrutiny
and rising demand for water regardless of economic cycles have put
more pressure on related infrastructure around the globe, according
to Mr. Kumar. That is forcing more utilities and companies to turn
to technology providers like Innovyze to manage and monitor their
operations more effectively, he added.
Innovyze was EQT's first U.S. portfolio company backed through
the firm's technology, media and telecommunications strategy,
although since then the firm has steadily added to the portfolio.
Late last year, the firm acquired a majority stake in Storable,
which provides software for the self-storage industry. Other U.S.
technology businesses it has backed over the years include
healthcare technology company Certara Inc., which went public late
last year; entertainment industry software provider Cast & Crew
Entertainment Services LLC; and healthcare revenue management
software company Waystar Inc.
Write to Laura Kreutzer at laura.kreutzer@wsj.com
(END) Dow Jones Newswires
February 24, 2021 07:17 ET (12:17 GMT)
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