The management of Environmental Resources Management (“ERM”), has announced that it has partnered with OMERS Private Equity (“OPE”) the private equity investment arm of the OMERS pension plan, to buy-out ERM in an off market bi-lateral process, from Charterhouse Capital Partners (“Charterhouse”) for an enterprise value of US$1.7 billion. The Alberta Investment Management Corporation ("AIMCo") will co-invest in the transaction. The transaction will see the ERM employee shareholders, the ERM Partners, re-invest in the business alongside OPE and AIMCo, highlighting their continued commitment to ERM and the confidence they share in the long term outlook for the company as well as their excitement in working with our new financial partners.
Created in 1977, ERM is the leading global provider of environmental, health, safety, risk, social consulting and sustainability related services. ERM works with both private and public sector clients to deliver sustainable outcomes to complex environmental issues, from Board level down through the organisation.
ERM has more than 4,800 employees including 600 partners and operates from 163 offices in 42 countries. It advises global and local clients spanning the oil & gas, mining, power, manufacturing, chemicals, infrastructure and pharmaceuticals sectors. ERM’s client base includes 60% of the Global Fortune 500. In recent years it has advised on the environmental and social issues of some of the largest and most complex development projects in the world.
ERM has a long track record of consistent growth, achieved organically and by acquisition. In 2014, ERM reported revenues of US$940 million making it the world’s largest pure play environmental and sustainability consultancy.
The transaction is in line with OPE’s investment strategy; ERM occupies a market leading position in a sector with strong natural growth characteristics driven by both regulatory and societal change. With a focus on consulting rather than the direct provision of engineering services it has an independence that is highly valued by its clients. Most importantly, in John Alexander and his senior team, it benefits from an outstanding management group with a proven track record of delivering sustainable growth.
OPE and AIMCo will support management to develop the business, both organically by further increasing market share through offering innovative new services in expanding international markets, and also by strategic acquisitions in what remains a large, but still fragmented sector.
Importantly, the transaction will see the ERM Partners including the senior management team make a substantial re-investment into the business alongside OPE and AIMCo.
John Alexander, CEO of ERM said:
“We are pleased that OMERS Private Equity and AIMCo share our vision for the future growth of our company and I am very confident that we have found the right partners to support us as we continue to build the business globally. We have achieved outstanding performance in the last few years, firmly establishing our presence in key emerging markets, while increasing our market share in the US and Europe. It is the right time to build on this market leading position with the strong commitment of the ERM partners together with our new financial partners.”
Mark Redman, OPE Senior Managing Director & Head of Europe said:
"I am delighted we have agreed to acquire ERM alongside management and AIMCo. This is our sixth investment since launching OPE’s European operation in 2009 and brings our capital deployed in Europe on behalf of our members to over CAD$2 billion. Most pleasingly, this is our second consecutive bi-lateral off market transaction which again shows our ability to deliver for discerning vendors. There is no better endorsement of the OMERS model which provides the environment for management teams to thrive, while building great businesses.”
Jonathan Mussellwhite, OPE Managing Director said:
“We have tracked ERM since 2010 and have developed a very good relationship with John and his team over the past five years. ERM is the stand out performer in a market with very strong growth characteristics, establishing itself in recent years as the pre-eminent global sustainability consulting firm. We look forward to supporting the partners and the company as they continue to build on this market leading position.”
Peter Teti, AIMCo Head of Private Equity said:
“AIMCo is very excited to partner alongside OPE and ERM management to invest in the leading sustainability consulting business in the world. We consider our investment in ERM to be an important portfolio addition for our clients, and further evidence of the Private Equity Group’s ability to execute on its strategy of direct investing. ERM possesses a unique combination of qualities that we seek in potential investments, including a world class management team, leading position within its market, and an ability to continue to achieve above-market growth both organically and via acquisition.”
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Notes to editors
Advisers in the transaction
Corporate finance advisory: RBC (Guy Mullin-Henderson)
Legal: Allen and Overy (Gordon Milne)
FDD: Ernst & Young (Ian Scott)
ERM is a leading global provider of environmental, health, safety, risk, social consulting services and sustainability related services. ERM has more than 4,800 people in over 42 countries and territories working out of more than 163 offices. ERM is committed to providing a service that is consistent, professional and of the highest quality to create value for our clients. Over the past three years ERM has worked for more than 60% of the Global Fortune 500 delivering innovative solutions for business and selected government clients helping them understand and manage the sustainability challenges that the world is increasingly facing. For further information visit www.erm.com
OMERS Private Markets and OMERS Private Equity
OMERS Private Markets (Borealis Infrastructure and OMERS Private Equity) manages CAD$19.4 billion in equity capital on behalf of the OMERS pension plan. OPM invests globally in infrastructure and private equity assets, with the goal of generating superior, risk-adjusted returns to help deliver secure and sustainable pensions to OMERS members. OPM has offices in Toronto, New York, London and Sydney. OMERS is one of Canada's largest pension funds with net assets of CAD$72 billion and an AAA credit rating. For more information, please visit www.omerspe.com or www.omersprivatemarkets.com
OPE’s prior investments in Europe comprise: Haymarket Financial ($700m start-up investment in 2009; V.Group ($520m buy-out in 2011); Lifeways (£207m buy-out in 2012); Civica (£390m buy-out in 2013); and Vue Cinemas (£935m buy-out in 2013 in equal partnership with AIMCo).
About Alberta Investment Management Corporation (AIMCo)
AIMCo is one of Canada's largest and most diversified institutional investment managers with assets under management in excess of CAD$90 billion. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates independently from the Government of Alberta and invests globally on behalf of 26 pension, endowment and government funds in the Province of Alberta, including the Alberta Heritage Savings Trust Fund. AIMCo is expanding its global private equity investments with a focus on direct transactions. For more information about AIMCo, visit www.aimco.alberta.ca