Private equity major KKR has agreed a £2bn buyout of UK infrastructure group John Laing amid growing demand within the sector.
The 403p per share deal represents a 35% premium to John Laing’s adjusted net asset value of 299p apiece on December 31, 2020, and 30% premium to average trading price for the month before the announcement. The trading price had shot up 18% in the past fortnight, and the company was trading at about 360p per share yesterday.
John Laing is an UK-based mid-market infrastructure developer with assets across the UK, Europe, North America, Latin America and Australia. Listed in 2016, John Laing’s share price saw a steady uptrend until reaching its peak of 400p before the pandemic. It plunged to 280p to hit a two-year low in July 2020 and has been trading within a 25% band since.
KKR has made the deal alongside infrastructure investor Equitix, which will acquire 50% in the existing asset portfolio immediately following the privatisation.
The buyout house said it believes John Laing has an attractive portfolio of infrastructure assets and a platform with significant expertise and growth potential. It will support the company with flexible access to long-term capital for growth opportunities.
Tara Davies, partner and co-head of European infrastructure at KKR, said, “John Laing has a strong market position and a forty-year track record of delivering major infrastructure projects. There is growing global demand for national infrastructure which delivers societal benefit and reflects technological advances and policy priorities across areas such as connectivity, renewable energy and transport.”
John Laing’s board said it intended to recommend the deal unanimously.
KKR brought in two managing directors from Capital Dynamics to expand its global infrastructure team last month. The firm is reported to be fundraising for a $12bn target fourth infrastructure fund, which if successful would massively outstrip the $7.4bn KKR Global Infrastructure Investors III in 2018.
The firm kicked off 2021 by announcing it had struck a $3.9bn hard cap final close for the largest pan-regional infrastructure fund to have been raised for the Asia Pacific market.
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Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/kkr-takes-uk-group-john-laing-private-in-2bn-deal-to-boost-infrastructure-strategy.html
