British private equity outfit Apax Partners is reportedly preparing an auction process for toilet firm Toi Toi & Dixi, according to reports in the German press.
Handelsblatt reported this week that it is looking to offload its investment in the portable toilet company, despite only taking over the company three years ago and doubling its value in the meantime.
According to Handelsblatt: “Toi Toi & Dixi sees itself as the world market leader for mobile toilets, which are mainly used on construction sites or major events. Business continued to boom during the pandemic, benefiting primarily from the strong construction industry, while business at concerts and festivals was weak.”
It added: “In total, the company has over 300,000 toilet cubicles, which are brought to their locations by 1,861 service vehicles. A subsidiary for plastics technology manufactures sanitary technology, but also supplies customers in the automotive and medical technology industries. A vehicle technology subsidiary produces special commercial vehicles, such as suction trucks for wastewater and faecal disposal.”
Building material shortages
Given that the company has increased in value so rapidly, there are questions as to why Apax Partners are now choosing to pull the chain. One school of thought posits that a slowdown in construction due to supply chain issues and rising costs may impact on Toi Toi & Dixi’s core business.
As Seeking Alpha wrote recently: “In August, a record percentage (18%) of EU contractors indicated lower production due to a lack of building materials or at least a delay in their delivery. This percentage shot up (29%) in January 2022, with the highest shortages in France and Germany.”
It added: “Shortages are also high in Germany, Austria and the Netherlands as production levels, and therefore demand for inputs are, and have remained high, in these countries. We expect that building material shortages will continue for a while, not least because of China’s ‘zero-Covid’ strategy and restrictions put in place to contain the virus in cities and ports that are very important to global production chains. However, there are very few construction firms that mention a shortage of building materials in Belgium, Spain and Turkey.”
Those seeking to buy Toi Toi & Dixi will not find the company cheap, though. Handelsblatt estimated that it could be worth €1.5bn to €2bn. That’s a lot of pennies that would have to be spent.