(Bloomberg) — PAI Partners is exploring a potential sale of M Group Services, a U.K.-based infrastructure services firm that could be valued at about $2 billion, according to people familiar with the matter.
The private equity group is working with Citigroup Inc. to evaluate options including an exit of M Group, the people said, asking not to be identified discussing confidential information.
Investors continue to pour money into infrastructure, drawn by the stable, recurring returns these assets can generate. A sale of M Group could attract both financial and strategic suitors, according to the people.
Deliberations are in the early stages and PAI could still decide to keep the business, they said. Representatives for Citigroup, M Group and PAI declined to comment.
M Group provides a range of services, including installation and condition assessments, to the water, energy, transport and telecommunications sectors in the U.K. and Ireland. The business, which has grown through acquisitions, saw revenue rise 24% from a year earlier to 736 million pounds ($975 million) in the six months through September 2021.
Infrastructure dealmaking remained strong throughout the Covid-19 pandemic and more large transactions are in the works.
A consortium led by Macquarie Group Ltd. and KKR & Co. is in advanced talks to buy the U.K. electricity distribution business controlled by Hong Kong tycoon Victor Li, in a potentially 15 billion-pound deal, Bloomberg News reported this month. Macquarie is also weighing the purchase of a controlling stake in National Grid Plc’s $10 billion gas transmission business.
PAI, which manages 17.4 billion euros ($19.1 billion) in assets, acquired M Group from private equity firm First Reserve in 2018. A sale of the asset would quickly follow PAI’s disposal last month of a majority stake in bottling company Refresco to rival KKR & Co. in a deal valued at about $8 billion.
(Updates with infrastructure deal in seventh paragraph, PAI’s AUM in final paragraph.)
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