Pacific Equity Partners has acquired New Zealand smart metering business Metrix through its Secure Assets Fund for approximately NZ$270 million ($183.3 million; €162.0 million).
Metrix, the smart metering arm of Mercury NZ Limited, will be bolted on to PEP’s intelliHUB business, in which it owns around 80 percent through the SAF. intelliHUB was formed after PEP simultaneously acquired subsidiary businesses in May from two separate corporations – Australian energy retailer Origin Energy and Switzerland-listed energy management company Landis+Gyr. The latter holds the remaining 20 percent in intelliHUB, according to a source familiar with the deal.
The deal for Metrix has been funded partly by equity from intelliHUB’s two shareholders and partly by debt.
Metrix has an installed base of approximately 460,000 smart meters in New Zealand, taking intelliHUB’s total across that country and Australia to almost two million. The deal includes a long-term contract for intelliHUB to provide metering services for Mercury NZ.
Speaking to Infrastructure Investor, PEP director Evan Hattersley said the acquisition was part of PEP’s strategic plan for the business.
“We aspire for further growth in the business, and we anticipate there’ll be opportunities for further acquisitions and partnerships,” he said. “We’ve had some early-stage discussions.”
The deal is expected to reach financial close in Q1 2019.
PEP’s Secure Assets Fund reached A$600 million ($433.7 million; €381.3 million) last week on its way to a target of A$750 million, after launching in Q1 this year.
“We’ve had a good reception from LPs for the fund,” Hattersley said. “We’ve been explaining to investors exactly how the fund works and why there is a gap in the market which we’re able to target. The fund allows us to focus on where businesses are going in the long term and we’ve been very pleased with its initial success.”
The Secure Assets Fund is targeting opportunities across various sectors including energy, utilities, transportation, logistics, telecommunications and health. The fund was set up to target opportunities in Australia and New Zealand that feature a combination of secure and predictable revenue streams as well as compelling growth and operational enhancement opportunities, according to PEP.
It is aiming for returns in the mid-teens, with secure, contracted revenues providing high single-digit to low double-digit returns topped up by either organic or inorganic growth of the assets and businesses held in the fund.