DC Advisory advised SEEIT on their acquisition of Värtan Gas

Background 

• Located and headquartered in Stockholm, Sweden, Värtan Gas AB (VGAB) is the capital’s independent and regulated gas Distribution System Operator (DSO) with a long history of supplying and distributing gas to the city’s inhabitants
• The majority of volumes consist of renewable biogas – sourced primarily from the city’s wastewater facilities – and are distributed to a diverse customer base in and around Stockholm city
• VGAB operates two business units:
  • Gasnätet Stockholm AB (GSAB), the regulated DSO which distributes gas through two networks (city gas and vehicle gas), totalling c.540km, supported by a 200-tonne storage terminal at Högdalen with 100MW of regasification capacity, along with another 40-tonne reserve storage facility at Frihamnen
  • Stockholm Gas AB (SGAB), currently the sole gas supplier on the GSAB network 
• SDCL Energy Efficient Income Trust (SEEIT) are a listed company that invests exclusively in the energy efficiency sector. Sustainable Development Capital LLP is the fund manager of SEEIT

Process 

• DC Advisory (DC) provided M&A advice to SEEIT throughout the acquisition process, including:
  • Process and bid strategy
  • Review and analysis of the business plan
  • Financial modelling and valuation
  • Coordination of due diligence advisers
  • Assisted on drafting Investment Committee materials; and
  • Advice on transaction documentation including the SPA.
• Arjun Infrastructure Partners acted as a facilitator to the transaction 

Outcome

• In October 2020, SEEIT successfully acquired 100% of the share capital in VGAB
• Following a complex process, DC was able to deliver a successful outcome for SEEIT, having led:
  • A bilateral acquisition process with a number of interim milestones prior to signing
  • A structured due diligence and valuation process
  • Multifaceted negotiations related to the transaction documentation
• This transaction reinforces DC’s experience in the regulated sector, having previously advised on several similar transactions across Europe, and in Scandinavian countries