BUSINESS DESCRIPTION

QUNDIS is a leading provider of sub-metering solutions in Europe, serving independent measurement service providers and the housing industry. QUNDIS products are sold in over 30 countries, of which the largest are Germany, Italy, France, Spain, the Czech Republic, Russia and Turkey. Further internationalisation will form an important part in QUNDIS’ future value creation.

The company was created in 2008 from the merger of QVEDIS (previously part of Siemens) and KUNDO SystemTechnik and currently has more than 250 employees. QUNDIS supplies a comprehensive range of sub-metering and communication devices used to measure, collect and transmit accurate consumption data for heat and water usage at the household unit level, serving the SME independent sub-metering supplier and building technology markets across Europe.

WHY DID WE INVEST?

QUNDIS has a robust business model, benefiting from a large installed base that generates a recurring and predictable revenue stream. A significant proportion of sales are replacement-related, driven by regular upgrades to more advanced read-out solutions. New installations are also increasing, due to more rigorous energy efficiency regulations across Europe.

HOW DO WE INTEND TO CREATE VALUE?

HgCapital is supporting management in its expansion strategy. This includes building on QUNDIS’ technological expertise in the area of remote, cloud-based, read-out solutions and further establishing and strengthening QUNDIS’ presence in emerging sub-metering markets in adjacent European countries. Further value will be created through: cost efficiencies; smart metering solutions; and the growing demand effectively to address energy savings.

WHAT HAS BEEN ACHIEVED?

Management has been strengthened and internal processes have been improved. The company consolidated its production facilities into a single modern site in 2013, allowing for additional capacity to drive international growth and profitability through increased efficiency. Furthermore, a highly-advanced gateway solution has been developed for a great range of applications and superior product features. Additionally there has been a development of QUNDIS in the wider energy efficiency, home automation and ‘Internet of Things’ markets.

HOW IS IT PERFORMING?

2016 saw strong growth for QUNDIS. While political turmoil in the large potential markets of Russia and Turkey is still holding back the company’s full potential, it has further broadened its customer base in the core markets of Germany and Italy and has built strong platforms to exploit the growing markets in France and other European countries. QUNDIS has established itself as a clear technology leader, providing some of the most advanced read-out solutions in the industry. We anticipate the enforcement of the European Energy Directive (mandatory installation of smart meters and likely move towards intra-year billing) will contribute to sustained growth rates going forward.

The Company’s valuation of its stake in QUNDIS has seen a £16 million increase over the year driven by accelerated profit growth arising from new business wins, cash generation and positive currency movements.

HOW WILL WE CRYSTALLISE VALUE?

There has been a strong appetite from a number of strategic buyers looking to diversify their product portfolio in the area of energy efficiency. The large market opportunity, robust business model, positioning as a leading solution provider in the sub-metering sector and the associated market opportunities will additionally drive interest from financial investors looking for assets in this growing market segment.

 

 

Sector Location Date of Investment Residual cost £’000 Unrealised Value £’000
Industrials Germany May 2012 12,540
33,844