Investcorp sells Neptune for $475m

Global investment conglomerate Investcorp announced the sale of water meter company Neptune Technology Group to strategic buyer Roper Industries for a total consideration of $475m.

The terms of the deal were not disclosed, according to a press release. Debt was assumed in the transaction and it is expected to close early next year. Merrill Lynch Capital Corp, JP Morgan Chase Bank and Wachovia are providing a senior secured credit facility for the deal.

Neptune Technology Group, and its subsidiaries DAP Technologies and DP Microware, provide meter and meter reading services to water utilities throughout the US and Canada. The company has a 35 per cent market share in the water meter business with an installed base of 27m meters. The company is also a leader in the growing automatic meter reading business, which allows a utility to read a meter remotely through radio frequencies.

Investcorp acquired Neptune from Schlumberger in November 2001 in a $330m deal. Investcorp committed $170m in equity to the transaction. “These businesses are an excellent strategic fit with Roper and will be accretive to our EBITDA margins, cash flow and net sales growth,” Brian Jellison, president and chief executive officer of Roper, said in the statement.

This is Investcorp’s second substantial exit in four months. In June, the firm sold memorabilia company Jostens to CSFB Private Equity for $1.2bn. MidOcean Partners was also an investor in Jostens and sold its stake to CSFB Private Equity. Investcorp led the buyout of Jostens in December 1999 for $25.25 per share in cash at a premium of about 38 per cent, or approximately $826m, plus the assumption of about $100m in debt.

Investcorp was founded in 1982 and has completed transactions with a value of approximately $25bn. The firm has offices in New York, London and Bahrain. Current portfolio companies include Aero Products, PlayPower and MW Manufacturers.