MIIF buys Taiwan’s infraVest for 13.3m euros

THE lure of the renewable-energy market has taken Macquarie International Infrastructure Fund (MIIF) to Taiwan, where it has invested 13.3 million euros (S$28 million) to acquire an operator of wind farms. The acquisition of infraVest Wind Power Co Ltd from Asia Wind Co Ltd and Meihui Windpark GmbH & Co KG is subject to regulatory approval and customary closing conditions, said MIIF.

The purchase offers MIIF the opportunity to participate in the emerging Taiwanese renewable-energy market, said Gavin Kerr, managing director of MIIF. ‘We anticipate that the acquisition will be yield accretive to MIIF,’ he said. ‘MIIF is well-positioned to make further investments in the Taiwanese renewable-energy sector as further opportunities emerge.’

The acquisition is priced at an EV/Ebitda (enterprise value/earn-ings before interest, tax, depreciation and amortisation) multiple of nine times, based on a forecast Ebitda of NT$296.2 million (S$13.6 million) for the 12 months ending Dec 31, 2008. The EV (gross debt plus acquisition price) is 58.6 million euros (S$123.4 million).

The payment will be funded by MIIF’s existing committed borrowing facilities, with final settlement expected to occur by the end of this year. infraVest Wind Power operates some 25 wind turbines in Miaoli County in Taiwan with a cumulative installed capacity of 49.8 megawatt, providing an essential service to the local communities. It benefits from long-term power purchase agreements at fixed tariff with Taiwan Power Company.

Besides stable and high Ebitda margins, infraVest also has predictable operating costs arising from long-term operations and maintenance contract with a subsidiary of Enercon Group – the world’s third-largest supplier of wind turbines – and minimal development capital expenditure, MIIF noted.

According to data from the Taiwan Bureau of Energy, renewable energy is estimated to increase to 10 per cent of total electricity capacity by 2010, of which wind generation is expected to make up 80 per cent of that renewable capacity by 2010.

The acquisition is the second Asian asset that MIIF has acquired this year. Including infraVest Wind Power, 17.7 per cent of MIIF’s portfolio will be located in Asia.

‘MIIF continues to develop a strong pipeline of Asian investment opportunities, which it expects will lead to further investments in high-quality Asian infrastructure assets this year,’ Mr Kerr said.

To this end, MIIF said due diligence is underway on a number of acquisition opportunities, while at the same time, it is looking to progressively divest some of its non-Asian assets to fund its Asian acquisition pipeline.

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