EQT Stands to Quadruple Its Money Through $1 Billion Innovyze Sale

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 [e-mail]

(END) Dow Jones Newswires

February 24, 2021 07:17 ET (12:17 GMT)

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