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31 August 2005
STAR Capital Partners announces sale of its
investment in gas pipeline business to the Challenger Infrastructure
Fund for €681 million
STAR Capital Partners (“STAR”) announces
the sale of Inexus, the UK’s leading independent gas transportation
company to the Challenger Infrastructure Fund for an enterprise
value of £465 million (€681 million). The sale is the
first realisation from its STAR 1 portfolio which focuses in the
main on investing in and developing capital intensive and asset
based investment opportunities.
Inexus (the “Company”) is the leader
in sourcing and developing “last mile” utility connections.
The Company designs, constructs, owns, operates and maintains gas
and electricity networks throughout the UK and focuses primarily
on the domestic new build market.
Since STAR acquired Inexus in August 2001, the
number of connections installed and contracted by Inexus has grown
from 135,000 to over 450,000 today, an increase in market share
from approximately 35 per cent to 47 per cent. The business reported
revenues of £22.9 million and EBITDA of £16.2 million
in 2004. This growth has created significant value.
Until 2004, Inexus focused on gas only connections
but has recently established itself as the first UK licensed, fully
industry-accredited and operational independent electricity distribution
network operator. Considerable growth is expected to be generated
from this new line of business.
Commenting on the realisation:
Stephen Wright, Managing Director of STAR
Capital said:
“Inexus is an excellent example of STAR’s strategy of
investing in asset-based businesses with low downside risk and growth
potential. The management and employees of Inexus have consistently
outperformed our expectations. Inexus has been an extremely successful
investment for us and we wish all those at the Company well under
its new ownership.”
Philip Gibb, Chief Executive Officer of
Inexus, added:
"The past four years have been a period of great achievement
for Inexus and we have grown substantially in terms of market share
and subsequent connections. The company is ideally placed for the
next stage of its development. This is a compliment to all employees
of the company. STAR has been a valuable and highly supportive partner
during our time under its ownership. We look forward to delivering
similar success to the Challenger Infrastructure Fund."
Tony Mallin, CEO of STAR Capital, added
“We are delighted with the outcome of our first realisation
from STAR I. This is proof that our differentiated investment strategy
works. We hope that our high quality portfolio and exciting deal
pipeline will continue to produce good risk-adjusted returns for
our existing and future Investors.”
Steven Bickerton, CEO of CIF, said:
“We believe this is an outstanding infrastructure asset and
we are particularly pleased with management’s decision to
invest over £12 million of their own money into Inexus. This
is a strong endorsement of their belief in Inexus’ growth
potential and reflects a strong alignment of interests between management
and the consortium.”
N M Rothschild & Sons Limited acted as financial adviser to
STAR in the transaction. Hawkpoint advised Inexus in relation to
the March 2005 refinancing.
Challenger Management Services Limited and Macquarie Bank Limited
acted as financial advisor to the Challenger Infrastructure Fund.
 
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