Sovereign wealth fund buys into Pittsburgh utility for $360m

The Government of Singapore Investment Corporation will buy a 29% stake in Duquesne Light Group from DUET, the Sydney-listed energy investor that acquired Duquesne during a $3.15bn Macquarie-led buyout in 2007.

The $100 billion Government of Singapore Investment Corporation has agreed to buy a 29 percent stake in Pittsburgh-based transmission utility Duquesne Light Group for $360 million.

The sale marks the most significant liquidity event for the Pittsburgh utility since it was taken private by a Macquarie-led group of investors for in a $3.15 billion transaction that closed in 2007.

The sale price of $360 million is about 8.7 times the level of Duquesne’s earnings before interest, tax, depreciation and amortization for the company’s 2010 fiscal year, according to a statement from the seller.

The seller, Sydney-listed energy investor DUET Group, said in a statement that “the sale process was highly competitive, attracting strong interest from a number of bidders”.

However, the deal’s completion hinges on whether any of the other infrastructure funds that own Duquesne opt to buy the stake from DUET on the same terms as Singapore, DUET said in the statement.

The other owners include Macquarie Infrastructure Partners (22.1 percent), Industry Funds Management (22.8 percent) and four unlisted Australian funds (26.1). Together with DUET, they paid $954 million in cash equity toward the deal in 2007, according to an old press release.

DUET expects the transaction to close by the end of March 2011.

The firm, a joint venture of Australia’s Macquarie Group and AMP Capital, said the sale will simplify its portfolio and refocus it on Australia. DUET also expects to use the sale proceeds to pay down its corporate debt facility, which is currently drawn on A$514 million (€366 million; $498 million).

Shares of DUET ended the day unchanged on the Sydney Stock Exchange, closing on A$1.74