Infratil announces new capital and co-investor for Longroad Energy
Summary
Completion of the transaction is expected in the last quarter of the calendar year.In early 2022, Longroad initiated a process to seek a minority investor to join in raising an additional US$500 million of capital to support increasing its renewable development activity and scale. The business is planning to reach financial close on ~1,000MWs of projects before year end, including Sun Streams 3, the 500MW solar and storage project in Maricopa County, Arizona.Infratil chief executive Jason Boyes said that the pre-money valuation of Infratils stake at completion implied by the transaction of US$800 million was significantly higher than the independent valuation received on 31 March 2022 of US$220 million, and listed market consensus. It was also in line with the enterprise valuation multiple achieved for the sale of Tilt Renewables Australian business in 2021, at 40 times Longroads FY2023E proportionate EBITDA of ~US$83 million1.Infratil is extremely happy with this outcome. The new investment from a leading global infrastructure investor in MEAG is a strong endorsement of the business and the sector, and we look forward to working with them.This transaction, alongside the sale of Vodafone New Zealands passive mobile towers announced in July, continues the trend of private market valuations of infrastructure assets for like-minded, long-term investors exceeding listed market consensus.NZ Super Fund Head of External Investments and Partnerships Del Hart said Longroad has been one of the NZ Super Funds most successful investments and, in line with our long-term, partnership approach to infrastructure development, we are pleased to both welcome MEAG as a co-investor and contribute more capital ourselves. MEAGs most recent infrastructure investments in the US comprise 400 MW of solar farms and battery storage in California in 2021, various regulated US water assets in 2020, as well as New Yorks Astoria Energy Partners and Long Beach Container Terminal in 2019.1 FY23 is to 31 December 2023.