TFG today announces the entry into definitive agreements to acquire Equitix Holdings Limited ("Equitix") from Cabot Square Capital LLP for an enterprise value of £159.5 million (the "Acquisition").
Equitix is an integrated core infrastructure asset management and primary project platform that currently manages in excess of £1 billion of investor capital across three 25-year core infrastructure funds focused on mid-size infrastructure projects and two energy-efficiency funds.
Equitix and its current 50+ member team - all of whom are expected to continue in the business post-Acquisition - have been directly responsible for leading, bidding, winning and closing in excess of 20 infrastructure projects in the United Kingdom, and have raised over £3 billion of debt and equity since inception in 2007.
The enterprise value represents approximately a five-times multiple of management's estimated calendar 2015 EBITDA.
TFG has agreed to acquire 85% of the company on the closing date with a broad Equitix management group owning the balance, thereby maintaining a significant portion of their current ownership.
The Equitix management team are committed to the long term success of the business and their ownership will increase over time to incentivise long-term alignment.
The Acquisition is subject to regulatory approval and certain other conditions and the purchase price is subject to adjustment until the closing date. There are also certain post-closing increases to the purchase price of up to a maximum of £15 million, payable in early 2017 to the extent the company outperforms its business plan.
The acquisition is expected to be financed with debt and equity.
Equitix was founded in 2007 by Geoff Jackson, Nick Parker and Hugh Crossley, all long-term practitioners in the infrastructure industry who have been actively involved in Public Private Partnership procurement since inception of the initiative in the United Kingdom. Equitix also works with partners, advisors and government bodies to identify, develop and manage primary projects that fit the investment criteria of the Equitix funds.
The Acquisition enables TFG to benefit from its ownership of the Equitix business as well as to potentially expand its investment portfolio to cover infrastructure assets - in Equitix funds and as well as in one-off investments or co-investments. TFG believes that there is substantial growth and performance potential in both the asset class and the asset management business and that the existing management team will be able to continue to grow the business. As a long-term investor with permanent capital and with a desire to invest in Equitix and its funds, TFG is highly aligned with Equitix, its investors and its operating partners in this effort.
The Acquisition will continue the diversification of TFG's investment portfolio, and is consistent with its goals to add new asset classes and new asset managers to TFG Asset Management, TFG's asset-management platform.
Paddy Dear, a Principal of TFG's investment manager and a Director of TFG, said, "We are delighted to be buying Equitix and be partners with Geoff, Nick, Hugh and their talented team. We strongly believe in the asset class, the asset management skills of the team and the long-term growth potential of the business."
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Geoff Jackson, CEO of Equitix, added, "We are very pleased to have found TFG as a new owner and partner in our business. We believe their permanent capital, their long-term vision and their strategic thinking should benefit Equitix, our investors, our infrastructure operating partners and our employees."
The Acquisition will also be a topic on the Q3 2014 Investor call, which is scheduled for 12 November 2014.