8. Backed by PE: No Dig Alliance
Since 2021, the Norway-based buyout fund Equip has bought multiple companies that specialise in no-dig methods in the Nordics. The GP created No Dig Alliance, which consists of five companies (to date) that work together to “create a leading force within no-dig in the Nordics” according to Partner in Equip Capital, Torkild Hebbert Haukaas.
The story of No Dig Alliance started within Equip. Partner Torkild Hebbert Haukaas did some research on his own, based on the knowledge that public infrastructure is underfinanced, and especially within the water and sewage network. After some desktop research and independent studies, he came across the no-dig market. “I was quite impressed with what we found; the no-dig market is in fact a hidden pearl of a market”, he says.
According to Haukaas, the reason is simple: “In the vast majority of cases, it is not only faster and cheaper, but you also reduce the carbon emissions significantly, compared to digging up a street, which can also entail quite large costs to society – for example, caused by the prolonged closure of a road in a city centre.”
An alliance of the best companies in the no-dig industry
“The market we discovered was quite fragmented, with many different companies. We saw the opportunity to create a specialised actor that is best at no-dig methods in the Nordics. And, from an operational perspective, it made sense to combine resources, enabling the companies to share their machines, to work better with sales and, not least, to work better with tenders, which is important for public sector customers”, Haukaas continues.
Patrik Larsson started as CEO at No Dig Alliance in 2021, joining shortly after Equip had acquired two Swedish companies – Riggtech and Pollex, both of which were entrepreneur-led companies that specialised in no-dig methods. He himself has over 20 years’ experience from the industry, and was excited to head the group:
“The reason why this was interesting for me to take on was the impressive and thorough groundwork and market analyses that had been done by Equip beforehand. There is undoubtedly a lot of potential in this industry. Another factor is, of course, the fact that I strongly believe that these solutions are the future, and that the no-dig method is a contribution to improving society – both in terms of emission cuts and efficiency”, he explains.
Since Larsson started as CEO, No Dig Alliance has acquired three more companies – the Finnish company Savon Suuntaporaus, the Swedish company Quickpipe, and their latest acquisition, NCC’s Swedish and Norwegian trenchless pipe installation operations.
“We use acquisitions to get started. Call it a lever for what we want to achieve. We call ourselves the No Dig Alliance as we are an alliance of the best companies and entrepreneurs within the industry. The entrepreneurs stay on board and reinvest in the alliance. We don’t want local ownership and sub-optimalisation – everyone owns at the top, and thinks as a group and cooperates”, says Haukaas.
Great potential to reduce carbon emissions within the industry
Larsson explains that their mapping of the market within pipe renewal shows that approximately 70 % of the tasks could potentially be carried out using no-dig methods. Today, they assume that only 20 % of these tasks are currently executed with these methods, rather than the traditional methods that involve the digging up of streets and other areas.
“Our biggest obstacle is traditional thinking. We have always done it like that, so we will continue doing it – that kind of attitude. And I guess it is only natural for humans to think that, in order to repair something that is underground, one must first dig it up and take a physical look at it. However, we now have methods that are more efficient, that save the environment from a lot of carbon emissions, that are cheaper and, not least, that reduce the societal costs”, explains Patrik Larsson.
No Dig Alliance measures the carbon emissions that are saved by their customers by choosing no-dig methods, compared to using traditional methods, and the numbers are striking. Last year, No Dig Alliance alone prevented the emission of 14,000 tonnes of carbon – simply by replacing traditional methods with their no-dig methods.
“Although we are not alone in the industry offering these types of methods, too many are still choosing traditional methods for jobs that could be performed by no-dig methods. In that sense, we must also contribute to educating the industry about no-dig methods and all their benefits compared to the traditional digging methods”, Larsson continues.
“Since the founding of Equip in 2018, we have said that we want to make the world a better place by creating and building better businesses. That is central to our strategy, because that is also the kind of company that we ourselves would want to work at. It is also a commitment to our investors, who are equally concerned about this as we are. Our goal is that No Dig Alliance will become the leading company within the no-dig market, and will become a leader on sustainability – an ESG champion”, adds Haukaas.
Private equity ownership is an enabler for the companies
Being CEO of a private equity-owned company was new to Larsson, when he started working at No Dig Alliance. We asked him what the benefits are for a company such as No Dig Alliance, and he was quick to reply:
“First, I must say that, for the companies and for No Dig Alliance in particular, a private equity fund is an enabler. What we often see within the construction industry is that companies reach a certain level, but in order to grow further, and to surpass this level, they need the big advantage that comes from having professional owners. Equip are our parents, so to speak. They have the knowledge, experience and the muscles that are needed in order to make investments and to acquire new companies, to bring them together in a group and to build a community within the group. By being a part of a greater alliance, we can all benefit from each other’s knowledge. And in the end, it always comes down to the people. I personally have enormous trust in what Torkild and his team at Equip can do for No Dig Alliance”, explains Larsson.