ICG wins Brookfield’s Enwave sale

29 September 2019 - 12:00 am UTC

Infrastructure Capital Group has edged out First Sentier Investment’s First Gas to win the auction for Brookfield’s Enwave business on Friday.


Update: the names of banks providing the debt was added after publication.


ICG paid an enterprise value of between AUD 415m-AUD 420m (USD 280m-USD 284m) for the business, which includes gas distribution and retail company Tas Gas Networks and District Energy, according to two sources close.


The debt comprised about AUD 200m of the price paid and was provided by Commonwealth Bank and Bank of China. Financial close is expected by the end of November, one of the sources said.


The sale price is about 11x EBITDA based on about AUD 38m combined earnings for the two businesses.


Four groups lodged final bids on 17 September. As well as ICG and First Gas, there was Australian Gas Networks (AGN), owned by CKI Group, and Pacific Equity Partners (PEP), although PEP did not bid for all of Enwave, according to a third source close.


The bidders were shortlisted to ICG and First Gas. Two of the sources said the price difference was small. One said it was within AUD 10m.


In the week leading up to contract signing late on Friday night, there was ongoing due diligence and both finalists were in the running until then. This included important negotiations over the shareholder sales agreement as well as finalising warranty and indemnity insurance.


Tas Gas Networks is the monopoly gas distributor in Tasmania to about 60,000 properties across the state. It is also the largest retailer of gas in Tasmania, as well as a distributor and retailer of gas to 12,500 properties in 10 towns in regional Victoria.


District Energy provides heating and cooling as well as water and wastewater for three large apartment precincts in NSW and South Australia, including at Central Park and Mascot in Sydney as well as Tonsley Park in South Australia.


Citi and Herbert Smith Freehills were advising Brookfield. Lazard was advising ICG. RBC Capital Markets was advising First Sentier Investments, as previously reported.


Brookfield, ICG, First Sentier, AGN and PEP declined to comment.


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