PE investment in the European infrastructure sector through late July hit $41.7 billion, according to PitchBook data, but the figure is heavily skewed by two mega deals accounting for 98% of the total.
The largest investment by far was Blackstone‘s $26.5 billion recapitalization of Mileway. The company, which offers last-mile logistics support for companies like Amazon, has benefited from growing demand for ecommerce following the pandemic.
The $14.6 billion buyout of waste and water management company Suez accounted for the vast majority of the remaining value. The deal closed in January, almost a year after rival Veolia announced its intention to acquire the company.
There has been increasing competition for infrastructure-related assets, as they’re regarded as a hedge against inflation, which has spiked in recent months. At the same time, corporates are taking part in fewer deals, with many focusing instead on shoring up their balance sheets. The current economic environment is also hampering dealmaking.
Earlier this month, the £15 billion (about $18 billion) takeover of UK Power Networks by a group led by KKR and Macquarie collapsed after the seller, CK Infrastructure Holdings, pulled out. According to the Financial Times, the seller decided to raise the sale price two days before the agreement was due to be signed because it decided inflation has increased the value of the asset.
Related read: Who are the most active PE investors in infrastructure?
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