Infracapital boosts Polish presence with gas pipeline buy

The deal, secured through the Infracapital Partners II fund, sees the UK firm acquire Duon just a year after vendor Fortum bought into the company.

Infracapital has agreed to buy Polish gas distribution company Duon Dystrybucia from a subsidiary of Finnish energy firm Fortum.

Owning over 480km of gas pipelines in Poland, Duon also runs 20 liquefied natural gas plants and serves a market of over 4,800 people.

The deal represents yet another change of ownership for Duon and a quick sale for Fortum after it bought the company in March 2016. Fortum said Duon is a “non-core” asset for the firm as it refocuses its strategy towards heat and clean energy. The company agreed a similar deal last July when it sold its Swedish gas operations and network to London-based fund manager iCON Infrastructure.

While Fortum last year paid about €100 million for Duon, both Fortum and Infracapital declined to state the size of the latest deal.

The acquisition will be made through the Infracapital Partners II fund which launched in 2012 and closed on £1.3 billion ($1.7 billion; €1.5 billion) in 2014. The 12-year vehicle has already sold two of its investments, offloading Calvin Capital to KKR last year and most recently, agreeing the sale of Affinity Water to Allianz, DIF and HICL for £687 million.

Infracapital sees its buyout of Duon as complementary to its 2015 purchase of Slovakian utility GGE, which owns heat, electricity and gas businesses in Slovakia, Poland and the Czech Republic.

“This exciting acquisition strengthens our existing exposure to the well-developed Polish energy market, consistent with our strategy of growing value by building scalable investment platforms,” said transaction director Alberto Signori. “Duon has a strong market position and benefits from long-term, stable revenues.”

Infracapital is also present in the Polish telecoms market after it formed a joint venture towards the end of last year with Alcatel-Lucent Poland, owned by Nokia. The pair this week emerged victorious in a tender to build high-speed internet connections in Poland’s rural Swietokrzyskie province.