Target Information

Energetics is a UK-based company specializing in the design, ownership, and operation of 'last mile' electricity and gas connections. Since its establishment in 2006, Energetics has successfully built an extensive network comprising 225,000 installed connections that cater to both residential and commercial customers. This formidable infrastructure positions the company to generate stable, inflation-linked cash flows over the long term, benefiting from a robust regulatory framework and long-lived assets.

Under the leadership of a highly experienced management team and a skilled workforce, Energetics boasts a proven track record in delivering sustainable performance and encouraging growth in the energy sector.

Industry Overview in the UK

The energy sector in the UK is undergoing significant transformation, driven by the increasing demand for reliable energy sources and the government's commitment to reducing carbon emissions. As part of its long-term strategy, the UK government aims to enhance infrastructure development, particularly in areas that support sustainable energy solutions. By fostering innovation and investment, the government is creating a conducive environment for businesses like Energetics.

Additionally, the growing housing market in the UK presents a considerable opportunity for energy companies to expand their operations. With government initiatives promoting housing development, there is a heightened interest in ensuring that energy connections keep pace with construction activities. This demand creates a favorable landscape for Energetics to capitalize on its existing infrastructure and expand its service offerings.

The market dynamics in the UK favor companies that can provide essential energy utilities, particularly those that demonstrate strong design and build capabilities. As Energetics showcases significant expertise in developing effective energy solutions, it stands to benefit from ongoing industry trends and evolving customer needs.

Overall, the outlook for the UK energy sector is promising, characterized by a blend of regulatory support, market potential, and ongoing investment needs. As challenges related to energy supply and environmental sustainability persist, companies like Energetics are well-positioned to play a vital role in the future of energy provision.

Rationale Behind the Deal

The decision to invest in Energetics aligns with Infracapital Partners III's overarching strategy of delivering essential infrastructure capable of meeting the changing demands of society. Energetics, with its substantial and established network, represents a foundational investment within the portfolio, projected to yield attractive returns while benefiting from stable income generation.

This investment leverages the strength of Energetics’ existing relationships and capabilities within the UK energy market, allowing for substantial scalability and opportunities for growth. The combination of established assets and market demand significantly enhances the potential for long-term profitability.

Investor Information

Infracapital Partners III, having completed its Final Close in June 2018, is dedicated to investing in essential infrastructure across Europe that supports long-term economic growth. Their strategic focus is on critical sectors that address societal needs, such as energy, transport, and utilities.

Martin Lennon, the Head of Infracapital, emphasizes the investment's significance within the portfolio, indicating confidence in Energetics' ability to deliver yield and capital returns in the current market environment.

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The investment in Energetics is viewed as a strategically sound decision given the company's established presence in a vital sector of the UK economy. The combination of a highly trained management team and operational excellence positions Energetics well for achieving sustained growth and profitability.

Furthermore, the supportive regulatory framework enhances the attractiveness of this investment, providing a stable environment for revenue generation. The company’s capability to utilize its existing network while exploring new opportunities reflects a compelling value proposition for investors.

Additionally, the robust demand for energy due to the rapid growth in the housing market underscores the potential for multifaceted growth avenues. Energetics is strategically positioned to not only meet current demand but also to expand its services in response to emerging market needs.

In conclusion, Energetics represents a sound investment that is likely to yield favorable returns, driven by its market position, operational capabilities, and alignment with broader industry trends.

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