Key Investments

This page shows Electra's current significant Buyouts and Co-investments (valuation as of 30 September 2018).

Sentinel Performance Solutions
Manufacturer of chemicals, water treatment products and services

Sentinel Performance Solutions

Year ended 30 September    
  2016 2017
  £m £m
Sales 16.1 18.0
Operating Profit 0.3 1.7
EBITDA 2.2 3.0
ROCE 7.5% 12.6%

In February 2011, Electra invested £16 million in the buyout of Sentinel. The business subsequently encountered difficult trading conditions and, in December 2015, Sentinel agreed terms with its existing lender to amend and extend its debt facilities until March 2020 on improved terms. At this point Electra invested a further £1 million. In July 2017, Epiris’s 1% interest in the investment was purchased.

Sentinel is a leading manufacturer of chemicals and physical devices to improve the performance and efficiency of residential heating and hot water systems. Sentinel’s products achieve a premium price which reflects its strong brand, quality products and well-established relationships with key influencers in the sales process such as boiler manufacturers and RMI/construction project specifiers.

The markets in which Sentinel operates have become increasingly competitive in recent years, with a new entrant taking a significant share shortly after the 2011 transaction. Demand for Sentinel’s products is supported by legislation (use is mandatory in the UK), energy efficiency targets and the resilience of the underlying boiler market, with consumers worried about increasing energy costs.

Innovation has been an important part of Sentinel’s recent recovery with strong international growth driven by new products; primarily its line of next generation filters which are tailored for country specific requirements. Partner deals with original equipment manufacturers have also improved, with legislation in certain countries dictating that system checks must be carried out by an independent third party, creating opportunity for follow on sales.

Although trading in the latter part of the year was impacted by a reduction in the stock held by a few of the company’s larger customers, this is expected to be a one-off effect. The company is confident that continued investment in research and development will lead to further growth across its markets.

Activity:

Manufacturer of chemicals, water treatment products and services

Date of initial investment:

February 2011

Type of deal:

Buyout

Equity Ownership:

55%

Cost:

£17m

Valuation:

£4m

Multiple of cost:

0.2X

Location:

Europe

Website:

www.sentinelprotects.com

Management:

Steve Goodwin, CEO; Nick Brayshaw, Chairman

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