3i acquires Infinis division for £185m from Terra Firma

Kenny Wastell
31 October 2016

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3i has invested ТЃ185m to wholly acquire the landfill gas division of British alternative energy company Infinis Energy from Terra Firma.

The move comes a year after Terra Firma wholly reacquired Infinis in a take-private deal valuing its listed portfolio company at £555m.

The GP announced in May that it had appointed RBS to sell the landfill gas division, while Goldman Sachs and Capital Markets were appointed to oversee the sale of its wind farm operations.

Following the deal, which is to be financed by the 3i Infrastructure division, Infinis will target cost efficiencies and seek opportunities for monetising spare engine and grid connection capacity. In September, credit rating agency Fitch Ratings revised the company's outlook from 'stable' to 'negative'.

According to a statement, 3i Infrastructure has now fully invested the £385m raised from a share issue in June 2016. Other recent investments by the division include a €204m investment in Belgian maintenance equipment rental company TCR and a €57m investment in French renewable energy company Valorem.

The Infinis deal is expected to complete in November 2016.

Previous funding
Infinis was created when Terra Firma split portfolio company Waste Recycling Group (WRG) into two subsidiaries: waste disposal and renewable energy. Terra Firma bought WRG in 2003 for €836m and followed this investment with the €357m acquisition of the UK landfill business of Shanks in the same year.

Terra Firma then merged the two businesses and sold off the waste disposal division for €1.4bn to Fomento de Construcciones y Contratas in 2006. The GP retained the renewable energy division, renaming it Infinis, and brought in a new management team, specifically a new CEO, CFO, commercial director and head of wind power development.

Terra Firma then listed Infinis on the London Stock Exchange in late 2013 at 260 pence per share. The IPO valued the business at £780m.

In October 2015, Terra Firma took the company private, offering shareholders 185 pence per share. In the period between listing and subsequently de-listing the company, Infinis's share price had fallen by close to 50%. According to the offer statement at the time, the company intended to undertake an operational and administrative restructuring following the deal.

Company
Infinis operates 121 power plants comprising landfill gas sites and onshore wind farms in addition to seven outsourced sites. Infinis is headquartered in Northampton. The company recorded turnover of £236m for the year ending March 2015, as well as EBITDA of £142.8m.

People
3i Infrastructure – Richard Laing (chairperson); Ben Loomes, Phil White (managing partners, co-heads).