GLIL Infrastructure (‘GLIL’) and Arcus Infrastructure Partners (‘Arcus’) have announced the acquisition of UK energy infrastructure provider Smart Meter Assets 1 Ltd (‘SMA’) from BUUK Infrastructure.
SMA is the fifth largest meter asset provider in the UK electricity and gas markets, financing and leasing smart meters to energy suppliers under long-term contracts. SMA has an installed meter portfolio of around 1.6 million meters and is expected to achieve a total roll-out of over 2 million smart meters.
SMA’s two primary customers are OVO Energy and Utility Warehouse. It also has contracts with most domestic energy suppliers, resulting in 90% contracted coverage of its meter portfolio. Over time, SMA is expected to sign contracts with additional customers increasing contracted cashflows and diversify its customer base, whilst continuing to strengthen relationships with OVO Energy and Utility Warehouse.
Katya Romashkan, Portfolio Manager at GLIL Infrastructure, who is joining the SMA board, said: “Energy assets like SMA are a critical part of the country’s future infrastructure and key to building a sustainable economy. We look forward to working with SMA and Arcus, which shares our long-term investment horizon and sustainable investment objectives, and to providing stable, inflation-linked returns for our members.”
Stefano Brugnolo, the Arcus Partner responsible for the SMA acquisition, added: “Having reviewed the European smart metering landscape since 2015, we are extremely pleased to acquire SMA, our second investment in this sector. SMA is one of the largest meter asset providers in the UK smart metering market, with a complementary opportunity set to Horizon. We look forward to working with both businesses as they play a leading role in the evolving UK energy landscape.”
The deal is the tenth investment by GLIL, the £2.5bn infrastructure fund backed by Local Pensions Partnership and Northern LGPS. Its investments to date include equity stakes in Anglian Water, Clyde Windfarm, Forth Ports, two fleets of trains with Rock Rail, a portfolio of PPP assets and investments in biomass and anaerobic digestion energy generation. Most recently, it acquired in November 2020 a 30 per cent equity stake in Agility Trains East (‘ATE’), a rolling stock fleet of 65 new intercity trains on the East Coast Mainline. Earlier this month, GLIL announced its appointment as an infrastructure investment partner for Government-established workplace pension provider Nest.