French water management company Saur’s owners have mandated Morgan Stanley to explore sale options for its municipal water services business, said four sources familiar with the situation.

EQT Infrastructure, CVC DIF and PGGM are considering launching a sale of the business as early as 2Q26, according to two of the sources. Saur’s municipal water assets account for most the group’s revenues.

The deal would entail carving out the municipal water services arm from Saur’s industrial water services unit, which saw its revenues fall in recent months, and sell the industrial operations later, according to the sources.

EQT Infrastructure IV acquired Paris-headquartered Saur in 2018 from the water utility’s former lenders, after a long-running restructuring, and then sold a 50% stake in the business to CVC DIF (then called DIF Capital Partners before its acquisition by CVC) and PGGM.

A clear perimeter for a potential auction is yet to be fully determined, but two of the sources said EQT Infrastructure is looking at options to exit its investment through the sale of the municipal water arm, while CVC DIF and PGGM would remain invested in the rest of the business for longer.

Saur generated EUR 132m of EBITDA in 2024 from its French municipal water activities, while international municipal water operations accounted for a further EUR 66m. Together they accounted for nearly three quarters of Saur’s total EBITDA, according to the company’s 2024 annual report.

The group is expected to publish its 2025 annual report later this month.

European water utilities have fetched EBITDA multiples ranging from low- to high-teens in recent years, according to Infralogic data. One of the sources said Saur’s municipal water arm could attract bids towards the middle of that range.

The sale of a 50% stake to CVC DIF and PGGM was agreed based on a multiple of around 14x, this news service reported at the time.

Saur, which is active across water distribution and wastewater treatment, has operations in over 25 countries, including Cyprus, Finland, Italy, the Netherlands, Poland, Portugal, Saudi Arabia, Spain, the UK and the US, alongside France.

Revenues of the French municipal water unit grew by 3.9% in the first three quarters of 2025 to reach EUR 353m, with the international business’ turnover jumping by 12.3% to EUR 102m, according to the latest quarterly report.

The industrial arm, which operates bespoke water projects for corporate clients, saw its revenues fall by 2.5% to EUR 132m due to a weaker 1H performance, even though it reported a growing backlog of new projects. Its FY24 EBITDA was EUR 76m.

Saur’s owners are waiting for the industrial water business’s numbers to improve before bringing it to the market, said one of the sources.

The potential sale of Saur’s municipal water arm comes amid an uptick of European water M&A activity, with some assets attracting strong interest from infrastructure funds.

EQT Active Core Infrastructure this month agreed to buy a 42% stake in Kelda Holdings, the parent company of UK water utility Yorkshire Water.

Meanwhile, Antin Infrastructure Partners is selling its Portuguese water management company Indaqua, which has attracted several interested suitors.

Saur, Morgan Stanley, EQT, CVC DIF and PGGM declined to comment.