The Australian Macquarie Bank has acquired the UK water utility South East Water plc (SEW) and its affiliated businesses from the Bouygues Group subsidiary, SAUR UK, for approximately £386 million.
The purchase price was funded by a combination of debt and equity with Macquarie contributing £111 million of equity.
SEW is the second largest of the twelve Water Only Companies in the UK and supplies 400 million litres of water per day to approximately 1.5 million people in the South East of England. SEW and its affiliated businesses have approximately 630 employees.
SEW had a regulatory asset base of £435 million as at 31 March 2003. The acquisition was undertaken at a multiple of 8.7 times historical earnings before depreciation, amortisation, interest and taxation (EBITDA) and implies a value for SEW’s regulated business of 93% of the regulatory asset base at acquisition.
Greg Ward Macquarie Bank’s CFO said the Bank’s intention is to sell the asset into a new fund, the Macquarie European Infrastructure Fund (MEIF) within 6-9 months, or to institutional investors. During the expected holding period, the impact on Macquarie’s profit as a result of consolidating SEW, after taking account of depreciation, interest and amortisation, will be marginally positive.
Macquarie currently manages almost 9.5 billion Euros invested in infrastructure assets around the world, including toll roads, airports, communications, water, rail and power assets.