Information on the Target

Infracapital, the infrastructure equity investment arm of M&G Plc, has finalized the sale of its approximately 74% stake in Eteck Energie Bedrijven B.V. ("Eteck") to Partners Group, a leading global private markets firm representing its clients. Eteck stands out as the market leader in providing decentralized energy solutions, specializing in the deployment of heating and cooling systems for residential and commercial properties throughout the Netherlands. The company is recognized as the fastest-growing heat provider in the region with the largest and most diversified portfolio of Seasonal Thermal Energy Storage ("STES"), playing a pivotal role in the country's energy transition.

Since acquiring a majority stake in 2017, Infracapital has significantly invested in Eteck to solidify its position at the forefront of the Dutch energy landscape, thereby unlocking further growth potential. Under Infracapital's stewardship, Eteck has expanded its operations to encompass over 100,000 home equivalent connections through more than 350 projects and approximately 900 B2B connections, effectively contributing to the Netherlands' ambitious decarbonization objectives. The investment strategy undertaken by Infracapital through Infracapital Partners II ("ICP II") focuses on sustainable investments in essential brownfield infrastructure to address the evolving demands of society and promote long-term economic growth throughout Europe.

Industry Overview in the Netherlands

The energy sector in the Netherlands is undergoing a significant transformation, driven by the urgent need to achieve climate goals and reduce carbon emissions. The Dutch government is committed to an ambitious plan aimed at transitioning to renewable energy sources, reducing reliance on fossil fuels, and promoting sustainable practices. This has led to increased investment in technologies that support the energy transition, including renewable heat generation and efficient energy usage.

Decentralized energy solutions are increasingly in demand as consumers and businesses seek reliable and affordable options to meet their heating and cooling requirements efficiently. The integration of Seasonal Thermal Energy Storage technology enhances the effectiveness of these decentralized systems, ensuring that energy redistribution aligns with actual consumption patterns.

The growth of the sustainable heating industry in the Netherlands is further supported by policy incentives and regulatory frameworks aimed at encouraging investment in renewable energy projects. As both private and public sectors collaborate to facilitate the transition, there are ripe opportunities for companies like Eteck that are positioned to deliver innovative energy solutions that meet these evolving market needs.

With the rise of sustainable energy solutions, consumers are becoming more environmentally conscious, pushing for lower carbon footprints in their energy consumption. This shift is reshaping the traditional energy market landscape, presenting exceptional growth opportunities for companies dedicated to providing sustainable heating alternatives.

The Rationale Behind the Deal

This transaction represents a strategic exit for Infracapital, which has made substantial contributions to Eteck's growth and market positioning over the past seven years. The decision to sell stems from the achievement of significant milestones and the realization of the company’s potential in the rapidly evolving energy market.

With a strong emphasis on sustainability, the deal aligns with Partners Group’s investment strategy, which focuses on essential services that serve society's changing needs. Eteck is well-poised to leverage Partners Group’s resources and expertise to further enhance its market influence and expand its operational capabilities in the heating sector.

Information About the Investor

Partners Group is a global private markets investment manager known for its extensive expertise across a variety of asset classes, including private equity, real estate, infrastructure, and debt. The firm manages a diverse portfolio on behalf of more than 1,000 institutional clients worldwide. Partners Group is committed to sustainable investment strategies and actively seeks opportunities that demonstrate strong growth potential while delivering positive societal impact.

The firm’s capabilities in building relationships and executing complex transactions have solidified its reputation as a go-to investment partner in the infrastructure space. By acquiring Eteck, Partners Group is further enhancing its footprint in the renewable energy sector, emphasizing its commitment to creating sustainable value for its clients and stakeholders.

View of Dealert

The acquisition of Eteck by Partners Group appears to be a strategic and timely investment. The company's leadership position in the decentralized energy solutions market and its alignment with the Netherlands' energy transition initiatives make it a compelling asset. Furthermore, the exit for Infracapital showcases its ability to identify and nurture growth-oriented investments, solidifying its reputation in the infrastructure investment arena.

From an investment perspective, Partners Group's acquisition signals confidence in the future of sustainable energy solutions. Eteck's extensive project portfolio and established customer base indicate strong operational resilience and growth potential, particularly within a regulatory environment focused on decarbonization and renewable energy promotion.

Investing in Eteck enables Partners Group to capitalize on the expanding market for sustainable heating and cooling solutions in the Netherlands. Given the projected growth in demand for these services, the deal is expected to yield substantial returns as Eteck continues to innovate and expand its service offerings.

Overall, this transaction reflects the increasing value placed on sustainable investments and the evolving dynamics of the energy market. With Eteck's established presence and future growth opportunities, Partners Group’s investment is poised for success, benefitting both its clients and the broader community.

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