Monday, December 16, 2024

Tetragon in talks over possible sale of Equitix, sources say

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By Amy-Jo Crowley and Andres Gonzalez

LONDON (Reuters) – Investment group Tetragon is looking at options for British infrastructure investor Equitix, including a possible sale, two people with knowledge of the matter said, potentially adding to a rush of deals by funds in alternative assets.

Tetragon Financial Group, based in Guernsey, invited investment bankers in the past few weeks to pitch for an advisory role on possible options for London-based Equitix, whose prime assets include stakes in London’s orbital motorway the M25 and the UK’s only high speed railway High Speed 1, the people said, speaking on condition of anonymity.

Spokespeople for Tetragon and Equitix declined to comment.

A deal could value Equitix at around 1.5 billion pounds, based on its latest earnings before interest, tax, depreciation and amortization (EBITDA) and recent valuation multiples in the sector, the people said.

Infrastructure managers are attracting increased interest from private equity firms which are seeking to become “one-stop shops” for their limited partners, who want to meet their investment requirements with fewer firms.

BlackRock agreed to buy Global Infrastructure Partners in January for $12.5 billion to increase its presence in alternative assets. CVC Capital Partners acquired infrastructure manager DIF before listing on the Amsterdam stock exchange in April this year, while General Atlantic bought infrastructure investor Actis.

Equitix is expected attract attention from larger asset managers and private equity groups in Europe and the U.S., the people said.

The sources said deliberations are in the early stages and no sale is guaranteed.

Equitix’s assets under management (AUM) total $14 billion with investments across transport, renewable power, environmental services, network utilities and data infrastructure, according to its website.

TFG acquired Equitix in 2014 for 159.65 million pounds ($208.73 million) from Cabot Square Capital, and currently holds 75% of the business.

TFG’s non-voting shares are listed on Euronext, and its market capitalisation was $800 million as of Thursday’s close. It manages Equitix through TFG Asset Management, which has $40.5 billion in assets under management via different investments, including Equitix, based on its website.

($1 = 0.7649 pounds)

(Reporting by Amy-Jo Crowley and Andres Gonzalez. Editing by Anousha Sakoui and Jane Merriman)

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