Ontario Teachers’ Pension Plan Board signed an agreement to acquire a majority stake in Società Gasdotti Italia (SGI), the company that transports natural gas between production sites, storage areas, regional distributors through a network owned by 1700 km of high pressure gas pipelines ( see the press release here).
The seller is Macquarie Infrastructure and Real Assets (MIRA) which had bought a 69.14% stake in the company in 2016 through its Macquarie European Infrastructure Fund 4. At the time, Swiss Life, through Swiss Life GIO II EUR Holding, had acquired the remaining stake in SGI (see here a previous article by BeBeez). Swill Life remains an investor in SGI. EY advised Macquarie Infrastructure and Real Assets for financial and tax due diligence services.
The value of the transaction was not disclosed, but an EV of 750 million could be hypothesized, applying the same premium of 30% on the RAB (Regulated Asset Base), that is the value of the net invested capital as recognized by the Authority for the electricity and gas, using the same approach used in the 2016 transaction. The acquisition by Macquarie and Swiss Life in 2016 had in fact been carried out for an enterprise value of between 550 and 600 million euros, which was more than 30% higher than the RAB’s 450 million euros, which corresponded to more than 12x the 2015 ebitda of 40 million euros. Considering that SGI closed FY 2019 with 77 million euros in revenues, an ebitda of 48.1 millions and a net financial debt of 461.5 millions (see the Leanus analysis here), if 2020 had closed in line with 2020 with an ebitda of approximately 48 millions, then the RAB would be 576 millions and, adding a premium of 30%, it would reach 750 millions.
MIRA and Swiss Life had in turn acquired SGI from Eiser Infrastructure Partners which in 2007, when it was still called the Abn Amro Global Infrastructure Fund, had purchased SGI from Italy’s Clessidra sgr for an enterprise value of 300 million euros. In turn, the Italian fund had taken over the company from energy Italian group Edison in the Summer of 2004 and had then renamed it SGI (see the press release of the time here).
SGI is the largest independent operator active in Italy in the natural gas transmission sector. Since MIRA and Swiss Life entered the capital, SGI has developed the San Marco-Recanati and Larino-Chieti gas pipelines and the natural gas transmission network in Sardinia together with Snam.
The Ontario Teachers’ Pension Plan Board is the manager of Canada’s largest category pension plan: it administers the pensions of the 329,000 active and retired teachers in the Ontario province. With a net worth of CAD $ 204.7 billion (as of June 30, 2020). Headquartered in Toronto, it has offices in Hong Kong, Singapore and London.
Dale Burgess, Ontario Teachers’ senior managing director for Infrastructure & Natural Resources, said: “This investment is in line with our strategy of acquiring regulated utilities that provide essential services with predictable cash flows. We believe that SGI’s network is well positioned to benefit from the shift towards low- or zero-carbon alternatives such as green hydrogen and biomethane to support decarbonisation efforts in Italy and Europe”. With this goal, in fact, In October 2020, SGI commissioned a feasibility study to the consulting firm DNV GL to transform its network from natural gas to gas originating from renewable sources.
Jiri Zrust, senior managing director and Head of Country Coverage of MIRA in Europe, commented: “We are proud to have supported SGI in its investment in the infrastructure network to ensure the continuous distribution of safe and reliable energy in Italy, SGI is helping to shaping the future of energy grids in Italy and we are delighted to have found a new owner who will oversee the next phase of development. ”
In Italy, MIRA still owns 49% of Hydro Dolomiti Energia srl, which it had bought from Enel in November 2015 for 335 million euros, thus joining in the capital the other shareholder Dolomiti Energia spa (see here a previous article by BeBeez). Initially MIRA had acquired 49%, but Dolomiti Energia then rose to 60% with MIRA trimming its stake to 40%. HDE is the leader in the Trentino Region in the production of energy from renewable sources through 22 owned hydroelectric plants and some other managed plants.
Also in Italy, last November 2020, MIRA, flanked by Crèdit Agricole, entered in exclusive talks for buying Ital Gas Storage (IGS), an independent operator in natural gas storage services, today controlled by Morgan Stanley Infrastructure Partners, which would be valued at around 1.2 billion euros, including the 860 million euros debt (see here a previous article by BeBeez).