BBIP pays $299m for Integrys unit

The UK asset manager is currently investing its maiden infrastructure fund, which it is raising with a target of $1bn.

Balfour Beatty Infrastructure Partners (BBIP) has acquired Upper Peninsula Power Company (UPPCO), a US power utility owned by energy group Integrys, for $298.8 million.

Integrys, which operates natural gas and electric utility operations in the Midwest, will post an after-tax gain of 60 cents a share upon completion of the deal. The company expects the transaction to add about 6 cents to earnings on an ongoing basis after one or two years of transition.

“The proceeds will substantially reduce the need to issue new equity to fund generation and infrastructure requirements at our other regulated utilities,” said Integrys chairman and chief executive Charles A. Schrock in a statement.

UPPCO, which was established in 1947 through the merger of three local utilities, provides distribution and power supply services to around 52,000 customers in the Upper Peninsula of Michigan.

BBIP and Integrys had been in discussion for about a year about a potential sale, which is expected to close upon meeting regulatory clearance and other customary conditions.

BBIP was formed in 2011 as a partnership between a team of infrastructure investment professionals and London-based developer Balfour Beatty. The firm completed its first deal in March 2013, acquiring a number of operational UK solar projects.

BBIP is currently raising its maiden fund with a target of $1 billion and had total commitments of $469 million as of December 2013. The firm held a first close of $420 million in January 2013, including $110 million from Balfour Beatty and a commitment from California State Teachers' Retirement System.