Baar-Zug, 12 August 2011
Partners Group, the global private markets investment manager, has closed an investment in the Spanish natural gas distribution company Madrileña Red de Gas, S.A.U. ("MRG") on behalf of its clients through the acquisition of shares from an entity of the Morgan Stanley Infrastructure group.
MRG operates a regulated natural gas distribution network with a presence in 40 municipalities in the region of Madrid, with the asset base of around 800'000 connection points (households connected to the network) amounting to 48% of the natural gas distribution activity in the region. The company is active in an attractive sector with a captive customer base and the favorable industry dynamics offer good growth potential with Spain still demonstrating a low gas penetration compared to other European countries. The Spanish gas distribution is regulated primarily by the Ministry of Industry, Tourism and Trade and the National Energy Commission and remuneration is based on regulatory calculations with inflation being passed through in the formula, offering distinct downside protection.
Michael Barben, Partner and Head Private Infrastructure, comments "We are very pleased to have completed this investment in what we believe to be an attractive company. The concentration of the asset base in a single highly urbanized region and the young network age should allow for superior margins, limited capex requirements and a high cash generation."