Astorg seeks €1bn-plus continuation fund for ‘TIC’ industry asset

The firm has previously tapped the secondaries market to run a €1.3bn single-asset process on investor administration group IQ-EQ.

European buyout firm Astorg is seeking to tap the secondaries market for a second time for a GP-led process that could be worth more than €1 billion, Secondaries Investor has learned.

The Luxembourg-headquartered firm wants to move testing, inspection and certification (TIC) services firm Normec into a separate vehicle, according to two sources familiar with the matter. Astorg invested in Normec in 2020 via its €4.24 billion Astorg Fund VII, according to its website.

The firm has hired Lazard as financial adviser on the secondaries process. Jefferies has been appointed to provide industry and M&A research advice, Secondaries Investor understands.

The process aims to formally launch at the start of this year and close by mid-year. It is expected to be based off a 31 December valuation date, Secondaries Investor understands.

Normec focuses on TIC for the life, safety and environment, and foodcare sectors. It was founded in 2015, according to its website.

The independent TIC sector provides testing, validation and declaration of conformity for regulatory reasons or for good practice, according to advocate body the TIC Council. It is a market estimated at around $250 billion in 2024, with projections estimating it to be worth more than $300 billion by 2029, according to various market reports.

Astorg is running the process because it wants more time and capital to further grow the business internationally while crystallising returns for investors, according to one of the sources. Normec has grown five-fold since Astorg’s 2020 acquisition and has expanded from its home market of the Netherlands into Belgium, France, Germany and the UK. It aims to expand into the US, the source added.

Astorg is no stranger to the secondaries market, having run a single-asset process on investor services group IQ-EQ in 2021. Lazard also advised on that process, as Secondaries Investor reported. AlpInvest Partners and Goldman Sachs Asset Management backed that deal, in what remains one of Europe’s largest GP-led transactions.

Investors in Astorg VII include Arizona State Retirement System, Los Angeles City Employees’ Retirement System and Peugeot Invest, according to data from affiliate title Private Equity International.

Astorg has also launched its own internal GP-led secondaries investment unit, which focuses on backing companies within its own investment strategy that are operating within its four key sectors: healthcare, business services, industrials and technology, as Secondaries Investor has reported.

Continuation fund deals involving sole assets accounted for 37 percent of the $62 billion GP-led activity last year, according to Greenhill‘s Global Secondary Market Review Full Year 2023.

Astorg and Jefferies declined to comment. A spokesperson for Lazard did not return a request for comment.