OMERS Infrastructure Announces Sale of Scotia Gas Networks Stake to Global Infrastructure Partners
London – OMERS Infrastructure has today announced the signing of an agreement to sell a 25% interest in Scotia Gas Networks (SGN) to Global Infrastructure Partners.
SGN is the second largest gas distribution network in the UK, operating Scotland Gas Networks plc and Southern Gas Networks plc, two of eight regulated gas distribution networks in England, Wales and Scotland, under a license from Ofgem to distribute gas through their infrastructure network. SGN serves nearly six million homes and businesses.
“SGN was our first infrastructure investment in Europe, and we are very pleased with the company’s seventeen-year track record of successful value creation for both customers and investors. We first invested in SGN at its creation in 2005, and it is now the UK’s leading gas distribution company across key operational and customer metrics. Over this period, we have supported significant regulated capital investment programmes, the development of several commercial businesses, and SGN’s preparations for the transition to hydrogen including the H100 project in Fife,” said Alastair Hall, Senior Managing Director and Head of Europe for OMERS Infrastructure.
“Our work alongside our partners and the SGN management team over such a sustained period is a strong example of our active asset management approach. We will redeploy the capital back into growing our C$30 billion direct global infrastructure portfolio. We wish the company and its new investors well,” he continued.
OMERS substantial UK holdings include investments in a variety of infrastructure, real estate (through Oxford Properties) and private equity assets, including venture capital.
BofA Securities acted as financial adviser and Latham & Watkins LLP as legal adviser to OMERS Infrastructure. The transaction is expected to close in Q1 2022, subject to regulatory approvals.
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OMERS Infrastructure manages investments globally in infrastructure on behalf of OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada. Investments are aimed at steady returns to help deliver sustainable, affordable and meaningful pensions to OMERS members. OMERS Infrastructure also manages capital in several assets for other institutional investors.
OMERS diversified portfolio of large-scale infrastructure assets exhibits stability and strong cash flows, in sectors including energy, digital services, transportation and government-regulated services. OMERS has employees in Toronto and other major cities across North America, the U.K., Continental Europe, Asia and Australia. OMERS is one of Canada's largest defined benefit pension funds with net assets of C$114 billion as at June 30, 2021.
SGN is the second largest gas distribution network company in the UK. With c.3,800 employees, its regulated gas networks consist of 76,000km of gas mains and services along with the associated infrastructure. From high pressure pipelines, moving to the intermediate/medium pressure systems and through a modern low pressure network, its equipment along with the engineering expertise of the workforce combine to provide a fuel source for industry and heat and warmth for its 5.9 million customers.
Its operations reach all ends of the UK. The network in Scotland distributes natural and green gas to 75% of households, including remote areas through the Scottish Independent Undertakings (SIUs). In Northern Ireland SGN Natural Gas delivers gas to eight towns in the west, having recently constructed high, intermediate and low pressure pipelines and mains. In southern England, SGN’s network stretches from Milton Keynes at the top end, to Dover in the south east and Lyme Regis in the south west, including all of south London, overall distributing gas to around 90% of households.
SGN is collaborating across the energy industry to show how hydrogen will be an essential ingredient in the UK’s road to a net-zero economy. The company also continues to grow in the non-regulated space through accelerating commercial opportunities.