Information on the Target

The Infinis Group has entered into an agreement to sell its onshore wind assets to institutional investors advised by J.P. Morgan Asset Management, with the transaction anticipated to finalize by early Q2 2017. This move marks a significant milestone for the Infinis Group, which boasts one of the largest independently-owned wind portfolios in the UK, featuring a generating capacity of 343 MW across 19 operational sites, along with an additional 66 MW site expected to commence operations by the end of February 2017.

This divestiture follows the Infinis Group's earlier sale of its landfill gas assets to 3i Infrastructure plc in December 2016. The completion of this transaction will mark the conclusion of Terra Firma's divestment of all operational assets under the Infinis brand.

Industry Overview in the UK

The renewable energy sector in the UK has seen robust growth, largely bolstered by government initiatives aimed at reducing carbon emissions and promoting sustainability. The country has committed to ambitious energy diversification goals, making investments in wind power crucial. As of late 2016, the UK was recognized as a global leader in wind energy generation, with comprehensive regulations creating a supportive environment for renewable energy investments.

UK wind energy capacity continued to expand, driven by both onshore and offshore developments. The government’s Feed-in Tariff scheme and Contracts for Difference have provided significant financial incentives for new projects. As a result, the landscape for renewable energy will likely witness unprecedented growth, particularly for companies that possess established operational frameworks and proven expertise.

Moreover, the increasing global demand for clean energy and supportive policies from both local and European administrations enhance the market’s appeal for institutional investors. With growing awareness of the benefits of renewable energy, the UK’s market for onshore wind is expected to maintain its upward trajectory.

The Rationale Behind the Deal

Terra Firma’s decision to sell Infinis’ onshore wind assets aligns with its strategy to capitalize on market demand for cash-yielding infrastructure assets. According to Guy Hands, Chairman and Chief Investment Officer of Terra Firma, this transaction represents a culmination of a successful transformation of Infinis from a non-core unit to a significant player in the renewable energy sector.

The strong market demand for large-scale operational capabilities in the renewable sector further validates the transaction, as it positions Infinis for continued growth and expansion under new stewardship, leveraging existing infrastructure and expertise.

Information about the Investor

J.P. Morgan Asset Management is a prominent global player in the asset management space, with over $96 billion in assets under management as of December 31, 2016. Their Infrastructure Investments Group, which emphasizes investments in renewables, aims to enhance its energy production capacity with the acquisition of Infinis' assets, elevating their total to over 3,200 MW across their holdings.

With over 400 professionals spread across 20 offices worldwide, J.P. Morgan Asset Management harnesses a wealth of experience and resources to support the development of renewable energy projects in alignment with long-term investment strategies. The firm has a historical focus on delivering returns through local investment talent and disciplined processes.

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This transaction presents a prudent investment opportunity, given the favorable conditions in the UK renewable energy market. The institutional interest demonstrated by J.P. Morgan Asset Management underlines the attractiveness of Infinis’s operational wind portfolio, particularly in light of the growing legislative and consumer preferences for sustainable energy solutions.

Additionally, the established operational capacity of Infinis, coupled with its pipeline of potential growth, enhances its strategic value. This aligns well with trends showing increasing energy demands and a global shift toward renewable sources. Investors are likely to see positive returns as the sector matures and as policies continue to support growth in renewable resource deployment.

Overall, the sale reflects a sound strategic move by Terra Firma and a strong positioning by J.P. Morgan Asset Management in the competitive renewable energy landscape. This partnership can drive further development in both operational efficiencies and market penetration, providing both firms substantial opportunities for growth and returns.

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