Overview

Attero owns two energy from waste (‘EfW’) plants, two sorting and pre-treatment facilities, six anaerobic digestion facilities, seven composting facilities and 10 landfills. The company processes waste from a diverse mix of domestic municipalities, commercial and industrial customers, as well as a number  of UK and Irish exporters.

Attero has good revenue visibility due to its long-term contracts with customers. It is well positioned within the Dutch market with two of the largest and most efficient EfW plants in the country, strategically positioned with good port, road and rail access for both import and domestic waste supply. In addition, Attero is strongly positioned to benefit from favourable underlying trends in the European waste market, driven by EU directives targeting more recycling.

Investment rationale

• Attractive opportunity in a new sector for the Company, with favourable long-term dynamics
• Attero operates two of the largest and best located waste treatment facilities in Western Europe, resulting in high efficiency and a low marginal cost
• The European Union requires member states to reduce landfill use, increasing the volume of waste requiring incineration
• Good revenue visibility from long-term waste supply contracts with municipalities, industrial customers, and waste exporters

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

BCA is a small regional airport in Belfast, Northern Ireland, located ten minutes by car from Belfast city centre In 2016 it served 2.7m inbound and outbound passengers. Its focus is domestic routes operated by scheduled carriers, serving business as well as leisure customers.

Currently four scheduled carriers (Flybe, British Airways, Aer Lingus and Eastern Airways) serve 17 domestic routes, including London Heathrow and London City. A small part of BCA’s traffic is international: Aer Lingus currently serves four sun routes (although this is due to drop to two) over the summer months; KLM serves Amsterdam; and Icelandair flies to Reykjavik.

Aeronautical revenues (airport charges) are not subject to economic regulation. Commercial revenues are generated principally from car parking, royalties on retail, food and beverage, car hire spend, rental income (lounges and offices) and advertising space.

Over 1,000 people are employed on the site, but only c.70 of those are employed by BCA. Many activities are outsourced (e.g. security, facilities management, air traffic control); and others are provided by third parties on-site (e.g. retail, food and beverage operations and ground handling). Fire services, maintenance, advertising, car parking and administration / management are the main activities that remain in-house.

Investment rationale

• BCA is critical infrastructure in Northern Ireland for people needing to travel between Belfast and the UK mainland
• Its location close to the city centre makes it the airport of choice for a significant part of the Northern Ireland air transport market: in particular for inbound business and leisure travel as well as for outbound travel for those based in, or close to, Belfast
• Opportunities exist to grow commercial revenues

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

DNS:NET is a leading independent telecommunications provider in Germany. Established in 1998, DNS:NET owns the largest independent fibre-to-the-cabinet network in the Berlin area and is rolling out a fibre-to-the home network in Berlin and the surrounding regions.

The company differentiates itself through a superior network, local brand recognition and attractive pricing of high bandwidth products, which drives high customer satisfaction. 3i Infrastructure’s backing will allow DNS:NET to accelerate its build programme to provide gigabit-ready connectivity to its customers. 

Investment rationale

• In June 2021, 3i Infrastructure plc invested c.€182m to acquire a 60% stake in DNS:NET.
• Fibre is superior to other broadband access technologies because it provides reliable low latency, high bandwidth and distance-independent connectivity for both download and upload.  Demand for FTTH connectivity is forecast to grow rapidly, as consumers normalise data intensive activities such as cloud-based remote working, high definition streaming and online gaming, and increasingly view high speed broadband as an essential service.
• Germany lags behind most European countries in its FTTH deployment, with only 14% coverage today compared to the European average of 33%.  The market is projected to grow at 30% p.a. to meet the German government’s objective of every one of its 43 million households having access to gigabit speed broadband by 2025.

Overview

ESP is an independent gas transporter (“iGT”) and independent electricity network operator (“iDNO”) providing the ‘last mile’ of connection between properties (predominantly residential, but also industrial and commercial) and the gas and electricity distribution networks.

It focuses on being an ‘independent asset owner’. It acquires (bids for) gas and electricity connections from ‘utility infrastructure providers’ (“UIP”), who have themselves designed and installed the connections for property developers. ESP is then responsible for maintaining the connections going forward and receives a regulated revenue stream for each connection from the gas and electricity companies who charge the end customer as part of their overall gas or electricity bill. Price regulation for both gas and electricity connections is based on the regimes of the gas and electricity distribution companies. Regulation is overseen by Ofgem.

Today ESP owns over 500,000 connections and has an order book for 200,000 more, making it the second largest iGT/iDNO in the UK. ESP also has a domestic metering business (representing almost one quarter of its revenues). Charges for meters are unregulated.

Investment rationale

• ESP operates under an established and proven regulatory framework that drives stable and high quality cash flow generation
• Significant growth is forecast from the demand for new UK housing. The financial crisis led to a number of years of low levels of new builds, which exacerbated the shortage of supply versus demand
• ESP does not undertake installation works and so does not compete with the UIPs. This lack of conflict of interest enables it to be a preferred acquirer of assets and to focus on customer service as it is a neutral host. This gives it a competitive advantage against other players in the connections market

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

EC Waste is the largest vertically integrated provider of solid waste services in Puerto Rico.

With locations throughout the island, EC Waste provides multiple waste services to over 80,000 residential, commercial, and industrial customers. The company operates four well-located, U.S. EPA permitted disposal sites, which enables EC Waste to serve all of Puerto Rico in an environmentally responsible and sustainable manner. Additionally, the company manages two transfer stations, runs the island’s largest regulated, solid waste collections network and hosts what will be Puerto Rico’s largest renewable natural gas collection project at its El Coqui facility.

Investment rationale

3i Group invested in EC Waste in November 2021.

• The company has enough capacity to serve all of Puerto Rico’s needs for decades ahead as communities and businesses consider moving away from non-compliant providers towards U.S. EPA permitted, fully compliant waste disposal options
• The company has a proven track record of providing top-tier services to the communities it operates in across the island
• EC Waste has made significant investments into its infrastructure and operations technology to improve performance and position the company for future growth
• There is significant opportunity to grow the company’s sustainable waste practices, such as its renewable natural gas collection activities

Regulatory information 
This transaction involved a recommendation of 3i Corporation, a US wholly owned subsidiary of 3i Group.

Overview

Headquartered in Esbjerg, Denmark, ESVAGT is a leading provider of emergency rescue and response vessels ("ERRV") and related services to the offshore energy industry in and around the North Sea and the Barents Sea. The company is also the market leader in the fast growing segment of service operation vessels ("SOV") for the offshore wind industry. 

Its ERRV services mainly involve the rescue and recovery of personnel, but also include the dispersion and recovery of oil spills, crew transfers and towing. ESVAGT is the leading provider of ERRV services in Denmark and Norway, with market shares of approximately 100% and 50% respectively, as well as an established and growing presence in the UK. The majority of ESVAGT's ERRV revenues are associated with North Sea oil and gas production support, with the remainder generated by supporting exploration activity.

ESVAGT is also the pioneer and market leader in the provision of SOVs to offshore wind farms, with seven bespoke vessels in operation and a further two under construction. SOVs are purpose-built, high performance vessels, providing efficient transport of maintenance technicians to wind turbines and other offshore equipment, under long term contracts. The offshore wind market, and hence demand for SOVs, is expected to grow strongly over the coming years, creating significant opportunities for the company.

ESVAGT has been operating since 1981, employs c.1,100 people and owns a fleet of c.40 vessels.

Recent developments

The wind service operation vessels ("SOVs") segment is the primary driver of growth for the business where ESVAGT is the market leader. In the North Sea, ESVAGT has committed to five new contract backed SOVs since our acquisition.

Internationally, ESVAGT is developing its focus on the US wind market, where it is preparing to support the expansion strategy of its European customers. ESVAGT is in discussions with the shipyard contracted to supply new SOVs, which is experiencing financial difficulties. We do not expect this to result in a material impact on ESVAGT's ability to fulfil its contractual obligations.

In the emergency rescue and response ("ERRV") segment, stabilising supply/demand dynamics allowed ESVAGT's management to successfully implement its strategy of improving contract coverage for the fleet. However, we anticipate that the recent drop in oil prices will impact ERRV demand in 2020 and negatively affect ESVAGT's spot business.

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Global Cloud Xchange (“GCX”) is a leading global data communications service provider and owner of one of the world’s largest private subsea fibre optic networks. The business provides high-bandwidth connectivity to a range of customers including over-the-top content providers, telecom carriers, new media providers and enterprises.

GCX’s 66,000km of cables span from North America to Asia. It is particularly strong on the Europe-Asia and Intra-Asia routes where it is well position to capitalise on growth opportunities and serve the exponentially growing demand for data traffic.

Investment rationale

In November 2021, 3i Infrastructure plc agreed to invest c.$512m to acquire a 100% stake in GCX. The investment will not complete before Summer 2022.

• GCX owns one of the most comprehensive subsea cable networks globally, serving customers in over 180+ countries
• Benefits from the rapidly expanding data market with data usage forecast to grow exponentially
• Operates in a market with high barriers to entry whilst providing an essential service
• Supported by a highly experienced management team who have a strong track record in the sector

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Herambiente is the Italian leader in the waste treatment and disposal sector. The company owns and operates a portfolio of c.80 waste treatment facilities, mostly located in the Emilia Romagna. The plants include landfills, waste to energy plants, anaerobic digestion and other waste sorting facilities.

Herambiente’s revenues originate primarily from waste treatment and disposal and from sale of the resulting by-products, including electricity from incineration, biogas from landfills and recycled materials. In 2016, Herambiente treated c. 1.7m tons of urban waste, 4.7m tons of special waste and produced 161,455,167kWh of electricity.

Investment rationale

• Strong market position in its home region of Emilia Romagna and more broadly in Northern and Central Italy
• The large plants portfolio provides technology diversification and exposure to increased recycling across Europe
• The highly fragmented market offers significant consolidation opportunities
• The expertise and environmental permits required to build new facilities provide significant barriers to entry

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Infinis is the largest generator of electricity from landfill gas in the UK, with a portfolio of 121 landfill sites and total installed capacity of over 300MW.

Recent developments

The business has performed well operationally and financially since our acquisition in December 2016, although long-term power price forecasts have decreased. As expected in our investment case, Infinis was a strong contributor to the Company’s income in the period, counter-balancing some other growth-orientated businesses in the portfolio.

Good progress has been made identifying opportunities to exploit the business’s spare engine and grid connection capacity. Together with the management team, we are reviewing projects in non-landfill gas generation activities, with 30MW of reserve power generation now under development. The Company has agreed to provide further equity of £12 million to support these projects.

In August 2017, Infinis appointed Tony Cocker as Chairman of the Board and Scott Longhurst as Non-executive Director and Chairman of the Audit Committee. Tony was previously CEO of E.ON UK. Scott is currently Group Finance Director at AWG and Managing Director of AWG’s non-regulated business.

In March 2018, 3i Infrastructure plc announced a follow-on investment of c. £125 million to fund Infinis’s acquisition of Alkane Energy, an independent power generator from both coal mine methane and Reserve Power operations and the largest generator from CMM in the UK.

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Ionisos is a leading owner and operator of cold sterilisation facilities servicing the medical, pharmaceutical and cosmetics industries. Established in 1993 in Civrieux, France, Ionisos is the third largest cold sterilisation provider globally and operates a network of 11 facilities in Europe with market leading positions in France and Spain. It has over 200 employees and a highly diversified customer base of more than 1,000 customers.

Ionisos delivers a mission-critical, non-discretionary service for the medical, pharmaceutical and cosmetics industries for whom cold sterilisation is an essential component of the manufacturing process. It is typically applied to single use products that would be damaged by the heat and/or humidity of hot sterilisation methods.

Investment Rationale

3i Infrastructure acquired Ionisos in September 2019, having committed to invest in July 2019.

• Diversification of 3i Infrastructure’s sector exposure and increased presence in the French market
• Sound market fundamentals with non-cyclical drivers, including an ageing population in Western Europe
• Growing demand for healthcare services increasingly relying on single use medical equipment
• Increasingly stringent regulation governing the sterilisation of medical, pharmaceutical and cosmetics products
• High barriers to entry
• Platform potential with growth opportunities organically and through M&A

Overview

Joulz is a leading owner and provider of essential energy infrastructure equipment and services in the Netherlands. It leases essential energy infrastructure equipment and meters to a large and diversified customer base of industrial, commercial and public sector customers. It has two business units: Infrastructure Services and Metering.

The Infrastructure Services business owns and leases medium voltage electricity infrastructure such as transformers, switchgear and cables under long-term contracts. The Metering business owns and leases approximately 50,000 electricity and gas meters for non-household customers under medium term contracts.

Investment Rationale

3i Infrastructure acquired Joulz in April 2019, having committed to invest in March 2019.

• Strong established asset base as well as good potential for growth
• Joulz is set to benefit from the Dutch government’s commitment to decarbonise the economy (the ‘Energy Transition’)
• The Energy Transition is expected to increase electricity consumption and demand for Joulz’s equipment and services
• 3i Infrastructure has relevant experience from investing in the Netherlands and previous investments in the electricity and leasing sectors

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Oystercatcher is the holding company through which 3i Infrastructure holds a 45% interest in Oiltanking Singapore Limited.

Oiltanking Singapore is a 1.3 million cubic metre facility focused on storage and blending of refined clear petroleum products for a range of blue chip customers. With a premier location, on Jurong Island, it is accessed by pipeline, sea going vessel and barge.

Oiltanking is one of the world’s leading independent storage partners for oils, chemicals and gases, operating 41 terminals in 18 countries with a total storage capacity of 16 million cubic metres.

Developments in the year

Our terminal continued to perform well as one of the leading gasoline blending terminals in Singapore and the wider region. The outlook for oil demand in the Asia Pacific region remains more positive than Europe’s, particularly driven by rising car ownership in Asia.

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Formed in 2007, Regional Rail provides freight transportation, car storage, and transloading services in New York, Pennsylvania, and Delaware across three railroads and over 155 miles of track connecting to a diversified Class 1 railroad network.

In 2018, the company moved over 13,000 carloads while serving over 70 customers across a diversified set of end-user markets including heating, fuel blending, agriculture, chemicals, and metals. The company’s wholly owned subsidiary, Diamondback Signal, is the premier provider of rail-crossing installation and maintenance services to over 100 short-line rail customers across 20 states.

In October 2019, Regional Rail acquired Pinsly Railroad Company’s Florida operations adding 208 miles of track across three short-line railroads.

Investment rationale

• Essential service provider with high barriers to entry - irreplaceable track infrastructure with direct access to key customer facilities and multiple Class I railroad connections
• Premium geography in the Northeast U.S. - located at the centre of a densely populated corridor within the New York, Philadelphia, Baltimore, and Washington DC metro areas
• Freight revenue is largely generated from local consumption tied to these attractive end markets
• Strong freight revenue growth of >9% p.a. since 2013
• Attractive platform for consolidation as short-line rail space is ripe for consolidation; acquisition of Pinsly Railroad Company’s Florida operations in October 2019

Regulatory information 
This transaction involved a recommendation of 3i Corporation, a US wholly owned subsidiary of 3i Group.

Overview

Headquartered in White Bear Lake, Minnesota, Smarte Carte is a leading supplier and manager of vended equipment in the travel and leisure industry. The company owns and manages baggage carts as the sole provider in 125 locations (including 49 of the top 50 airports in the U.S.). The company also owns and manages lockers and other consumer-rental equipment in amusement parks, fitness clubs, shopping malls and ski resorts.

Investment rationale

• Market leader across multiple product segments
• The aging population demographic, increasing international travel, growth in leisure travel and an increasing middle class are driving growth of the market
• Greg Hart, Chief Operating Officer for United Airlines, joined as a non-executive director to help guide the company’s future growth
• Partner with management to grow company’s global footprint, especially in Europe through our established track record in the airport sector with Belfast City Airport and TCR

Regulatory information 
This transaction involved a recommendation of 3i Corporation, a US wholly owned subsidiary of 3i Group.

Overview

SRL, which is headquartered in Cheshire, is the market leading temporary traffic equipment (“TTE”) rental company in the UK. SRL’s product range includes temporary traffic lights, adaptive detection systems, pedestrian and cyclist systems, variable messaging systems, barriers and CCTV. SRL offers its customers a full-service rental solution, which includes the planning and design of traffic management systems, installation, maintenance and integration with existing systems, as well as direct sales of equipment assembled by SRL.

SRL’s market-leading reputation is supported by its network of 30 depots nationwide, providing a 24/7 365 day a year service on which customers rely for quick deployment and reactive maintenance work.

Investment rationale

3i Infrastructure acquired SRL in December 2021.

• TTE is mission-critical to the safe use of roads
• SRL fits with the Company’s strategy of investing in companies with leading market positions and barriers to entry, yet with operational levers to achieve attractive returns for shareholders through active asset management
• SRL has sound market fundamentals through the increasing emphasis placed on health and safety, and a growing propensity to rent rather than own TTE
• Outsourcing ownership of TTE makes economic sense for traffic management companies, as it allows them to more efficiently manage maintenance and utilisation
• SRL has a market leading reputation and is trusted by its customers

Overview

Tampnet is the leading independent offshore communications network operator in the North Sea and the Gulf of Mexico. It is headquartered in Norway, with operations in the UK, Scandinavia and the USA.

Tampnet provides high speed, low latency and resilient data connectivity offshore through an established and comprehensive network of fibre optic cables, 4G base stations, and microwave links. It operates across four main business areas: fixed installations, mobile rigs and vessels, roaming for offshore workers and international carriers. The majority of its business involves providing fixed fibre links to oil platforms.

Investment rationale

3i Infrastructure acquired 50% of Tampnet in March 2019 alongside Danish pension fund ATP, having committed to invest in July 2018.

• Tampnet’s fibre optic links provide customers with mission-critical reliable communications
• Benefits from the growing requirement for high bandwidth and low latency in data networks
• More than 50 customers including oil and gas operators, offshore service providers and telecom operators
• Opportunity to grow into new segments such as offshore wind, commercial vessels and the point-to-point carrier segment

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.