Dutch bank NIBC's European Infrastructure Fund (NEIF) has agreed the sale of all of its assets to Irish petrol station company Applegreen and infrastructure investor Equitix in two separate transactions.
Applegreen announced on Thursday that it will acquire a 55% stake in UK motorway service station operator Welcome Break from NIBC for €361.8m.
Unquote understands that Equitix has agreed to buy the remainder of the NEIF portfolio, comprising six PFI projects in the UK and six continental European renewable energy assets.
The Welcome Break stake accounts for around two thirds of the value of the portfolio, which NIBC put up for sale in March.
Applegreen, which is listed on the London Stock Exchange, said that following its purchase of the 55% stake in Welcome Break, it will sell an 8.6% stake to existing Welcome Break shareholder Arjun Infrastructure Partners for €56.5m.
Applegreen will also invest a further £80m in Welcome Break and will have a 50.01% stake in the asset following the transactions.
Based on Welcome Break's adjusted EBITDA of £66.4m for the year to January 2018 and net debt of £391.6m, the prices Applegreen and Arjun are paying for their stakes both equate to an enterprise value of around 15 times EBITDA.
The Welcome Break transaction will be financed by a new debt facility of €300m and a proposed equity fundraising of a minimum of €100m. The debt facility has been underwritten by NatWest Markets and Lloyds Bank, while the equity fundraise has been fully underwritten to the value of €140m on a standby basis by Goodbody and Shore Capital.
Recent multiples for UK service station transactions include the 12.5 times earnings Antin Infrastructure Partners reportedly paid for a stake in Roadchef in 2015. Infrastructure funds invest in motorway service stations because they benefit from stable revenues and limited competition.
Unquote sister publication Inframation previously reported that London-listed 3i Infrastructure had formed a consortium with Arjun and fellow infrastructure investor Equitix to bid for the whole portfolio, with a view to Arjun and 3i Infrastructure sharing the Welcome Break stake and Equitix taking the other assets.
One source close to the situation said that Arjun began talking to Applegreen about a possible partnership when it became clear that 3i Infrastructure was losing interest.
Applegreen said it will be able to achieve operational efficiencies by combining its existing support functions with those of Welcome Break.
Aside from its stake in Welcome Break, Arjun's relatively small portfolio includes a 75% stake in UK water company South Staffs Water, which it acquired earlier this year. Equitix has more than 150 investments in health, education, social housing, utilities, highways, government accommodation, waste and renewables.
The NEIF assets Equitix is buying comprise wind projects in Germany, France and Belgium, solar assets in Germany and Spain, a Belgian biomass power station, and education and healthcare PFIs in the UK.
Equitix is also currently in talks about about buying the London-listed John Laing Infrastructure Fund for £1.41bn in consortium with fellow infrastructure investor Dalmore Capital.
Appia Investments, a consortium of investors led by NIBC, acquired Welcome Break in 2008 in a secondary buyout transaction from Investcorp reportedly worth around £500m. NIBC, through its European Infrastructure Fund I, took a 53% holding in the business, with co-investors ING and Challenger Life taking stakes of 29% and 14% respectively.
ING and Challenger exited the business to Arjun in July.
Welcome Break has 26 roadside service areas and 29 roadside hotels around the UK. The remainder of the NEIF portfolio comprises six PFI projects in the UK and six continental European renewable energy assets.
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