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.

Recent developments

• Attero performed strongly in the year, on the back of a higher electricity price outlook and good availability at its EfW plants. The Dutch electricity price cap applicable to the company is c.€190 per MWh, and this is expected to have a limited impact in the short term given the hedges already in place and current forward rates.

• Management is currently working on a number of major growth initiatives, including carbon capture for its two EfW plants, deployment of large solar farms on its closed landfill sites, and a material expansion of its existing anaerobic digestion business to capitalise on significant biomethane demand growth as the EU looks to materially reduce natural gas consumption. 

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. 

Recent developments

• In line with its business plan, in December 2022, 3i Infrastructure invested a further €18 million into DNS:NET in support of its continued FTTH roll-out. DNS:NET, like many players across the sector, has experienced delays in connecting and activating waiting customers on its network. It has also experienced delays in the handover of local authority constructed networks that it will then operate. 

• In January 2023, Andre Mueller was appointed as CFO. He brings a wealth of experience as a senior finance professional across a range of sectors.

• In July 2023, Ralph Steffens was appointed co-CEO. Ralph has a 25-year track record in telecommunications, including experience rolling out fibre networks. 

  _{Note:  FTTH: Fibre-to-the-home.} 

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.

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 over 1,000 people and owns a fleet of more than 43 vessels.

Recent developments

• ESVAGT has established a leading position in the offshore wind service operation vessels (‘SOV’) market. Its US joint venture, CREST, signed its first contract, a 15-year availability-based agreement with Siemens Gamesa servicing the Coastal Virginia Offshore Windfarm. This win positions ESVAGT very well as the near-term pipeline grows in the region. In Europe, a number of tenders will take place over the next 12 months and ESVAGT is expecting to benefit from its recent wins of green SOVs for Ørsted.
• The EERV segment continues to see strong momentum due to the improved oil and gas markets, attractive supply / demand dynamics and an increased focus on security of supply in Europe due to the war in Ukraine. ESVAGT has benefited from these attractive market conditions to extend several key contracts. 
• Inflation is generally positive for ESVAGT due to its index-linked contracts, however cost inflation, in particular fuel costs, has accelerated faster than expected in the period. 

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

Overview

Future Biogas is one of the largest anaerobic digestion (AD) plant developers and biogas producers in the UK, operating 11 AD plants on behalf of institutional investors under long-term contracts.

Future Biogas’s plants convert a wide range of feedstocks into clean and renewable energy through AD which produces biogas. Biogas can either be used to generate green electricity, or upgraded into biomethane and injected into the UK’s national gas network. Future Biogas produces over 500GWh of biogas per year, enough energy for over 40,000 homes.

Biomethane from AD is a ready-to-use and commercially-viable solution for hard to decarbonise industrial sectors. It does not require any upgrade to the existing UK gas infrastructure. Energy produced by AD plants is carbon neutral, as the CO2 released during the process matches the CO2 absorbed from the atmosphere by the feedstock.

Future Biogas promotes a regenerative farming approach, sustainably integrating feedstock from energy crops into agricultural systems. The circular process of returning digestate back to land can help replenish soil nutrients and carbon and displaces demand for carbon intensive artificial fertilisers.

Highlights

• Future Biogas is the largest producer of biomethane in the nascent UK market and a highly experienced developer and operator of AD plants, with full-service capabilities in development, construction and operations.

• There is strong political support and growing corporate demand for domestically-produced biomethane, which, as a direct substitute for fossil natural gas, has an essential role to play in decarbonising some of the UK’s gas dependent sectors such as heat, transport and manufacturing.

• On a national scale, the use of biomethane (vs. natural gas) allows the existing gas infrastructure to help meet the UK Government’s Net Zero and energy security targets without any change to the existing system.

• Future Biogas will develop a new generation of unsubsidised AD plants and sell the resulting biomethane under long-term offtake agreements to corporate buyers.

• In the longer term, Future Biogas intends to enter the nascent but high potential voluntary carbon offset market through carbon capture and storage.

• Future Biogas has a highly experienced management team with a strong track record in the sector.

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 positioned to capitalise on growth opportunities and serve the exponentially growing demand for data traffic.

Recent developments

The business is performing in line with expectations; lease revenues have grown strongly as the business prioritises recurring revenues over one-off cash IRU sales.

GCX is currently examining several opportunities to invest in new cables in the Middle East which would provide synergies with its existing network.

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 more than 150 operational sites and total installed capacity of over 400MW.

Recent developments

• Financial performance at Infinis is strong, driven by higher power prices and price volatility which benefitted the power response assets in particular. Infinis’s cashflows are positively correlated with UK inflation through index-linked corporate PPAs and the Government-backed Renewables Obligations Certificate and CfD regimes.
• Infinis has made significant progress establishing a 1.5GW solar and battery pipeline across various stages of development. 103MW of Solar and 16 MW of Battery are currently under construction and on schedule to start generating by summer 2023, which will bring Infinis’s operational asset base to over 550MW. Higher development capex has been offset by a corresponding increase in long-term forecast power prices. 

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 10 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.

Recent developments 

• Performance at Ionisos continues to be strong, with EBITDA growth exceeding expectations on the back of continuous strong demand in the medical and pharmaceutical markets, more than offsetting a downturn in the German cable industry. Inflation also remains a positive tailwind.
• In order to meet this fast-growing demand, Ionisos has made good progress on a number of growth projects. It acquired a facility in Switzerland from an industrial company, it started operations of a new plant in Kleve, Germany, in January 2023 (on budget and with additional customers beyond the anchor client), and it is actively considering further greenfield expansion plans in both new and existing locations.

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 more than 50,000 electricity and gas meters for non-household customers under medium term contracts.

Recent developments

• Joulz performed ahead of expectations in the year, with the Infrastructure Services business unit continuing to see strong market demand. In December 2022, the business raised further debt financing on attractive terms to replenish its revolving credit facility, which is used to fund growth capex.
• During 2022, as part of a planned transition, Sytse Zuidema was recruited as CEO. Sytse is an engineer by background and has experience successfully leading several fast-growing businesses.

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 Advario Singapore Limited (previously Oiltanking Singapore Limited).

Advario 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.

Recent developments 

• Performance at Advario Singapore in the period was in line with expectations for the year to 31 March 2023. The market for oil products continues to be backwardated, with future prices below current prices. However, strong activity levels resulted in high storage utilisation across the region which was supportive for good contract renewals in the period. Advario Singapore continues to be the premier gasoline blending terminal in Singapore and in the wider Asia Pacific region, and therefore commands good rates.
• The strategic transition to some green fuel storage is progressing well. In 2022, a first agreement was signed with an anchor customer to start storing and blending sustainable aviation fuel (“SAF”). The project is on track and is expected to be operational in 2023. We believe this gives Advario Singapore a first mover advantage for SAF related business. A further contract has been agreed with a second customer for storing sustainable marine fuel.

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.

Overview

Headquartered in White Bear Lake, Minnesota, Smarte Carte is the leading provider of self-serve vended luggage carts, electronic lockers, commercial strollers and massage chairs at more than 2,600 locations worldwide. For luggage carts, SmarteCarte is the sole provider in 125 locations, including 49 of the top 50 airports in the U.S. The company's products can be found 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. 

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.

Recent developments 

• SRL performed broadly as expected during the financial year to 31 March 2023. Traffic light rental revenues are growing strongly at c.15% per annum despite activity levels being held back by lower roadworks budgets in H2 2022, resulting in lower days on hire than forecasted. EBITDA growth in the period was supported by SRL’s strong market position and ability to increase prices in line with inflation.
• We are working closely with management to professionalise account management processes and optimise fleet utilisation and build. Progress has also been made to engage directly with the end-promoters of roadworks and beyond SRL’s traditional customer base of traffic management companies.