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F2i and AXA Private Equity acquire G6 Rete Gas from GDF Suez Energia Italia

A consortium comprising F2i – Fondi Italiani per le Infrastrutture SGR SpA – and AXA Private Equity, has signed an agreement to purchase Italian gas distributor G6 Rete Gas SpA, a wholly-owned subsidiary of GDF Suez Energia Italia SpA. The enterprise value of the deal is EUR772 million and is funded by a committed line of credit provided by Banca IMI and Unicredit.

Following its investment in Enel Rete Gas S.p.A. (September 2009) and its recent acquisition of E.On Rete srl (April 2011), this transaction expands the consortium’s footprint in reaffirming its position as the main independent operator in the Italian natural gas distribution market, with a 17% market share in terms of customers managed and second only to the Eni group. The Consortium is 75% owned by F2i and 25% owned by AXA Private Equity.
G6 Rete Gas operates 474 concessions and provides natural gas to approximately 990,000 customers across Italy (particularly in Puglia, which accounts for 32 percent of total customers), through a grid of approximately 15,159 kilometres.
In 2010 the company had revenues of EUR160 million and an EBITDA of EUR82million, reflecting a significant improvement in terms of revenues (up 11% on previous year) and an EBITDA margin (up 3.2% compared with the previous year).
The Consortium intends to complete the acquisition of G6 Rete Gas through Enel Rete Gas, with the objective to have the latter combine all the assets of the F2 Reti Italia group (a vehicle held by the Consortium, which owns an 80% equity interest in Enel Rete Gas) in the gas distribution sector.
Following the acquisition by F2i and AXA Private Equity, Enel Rete Gas has become a leader in Italian gas distribution operations in terms of investment and service quality, with: investments of EUR63.00 per customer, compared to the sector average of EUR47.00; grid inspection equal to 78%, compared to the national average of 55%; and an average time of 35 minutes to repair gas leaks, contrasted with the standard of 60 minutes set by the Energy Authority.
Thanks to these excellent operating standards, in 2010 Enel Rete Gas obtained a 44% quality ratio from the supervision authority, even though Enel Rete Gas only had a 13% market share.
Following the combination with E.On Rete and G6 Rete Gas, Enel Rete Gas will manage a pool of approximately 3.8 million customers, providing approximately 6 billion cubic meters per year through a grid of 53,000 kilometers.
With the G6 Rete Gas acquisition, the F2i Reti Italia group has strengthened its position in the natural gas distribution sector, particularly in view of the upcoming Minimum Territorial Areas.
The transaction is expected to be completed in the last quarter of 2011 and is subject to antitrust clearance.
F2i and AXA Private Equity retained Bank of America–Merrill Lynch, Banca Imi and Unicredit as advisors, the legal firm of Gianni, Origoni, Grippo & Partners for the deal and the legal firm of Ashurst for the financing.

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