KKR Acquires a 20% Stake in Sempra Infrastructure for $3.37 Billion

By Mariliana Fotopoulou Monday, April 5, 2021

The US infrastructure energy company Sempra Energy announced today that it has agreed to sell a non-controlling 20% stake in its new business platform Sempra Infrastructure Partners to KKR in a business deal worth $3.37 billion.

Sempra Energy corporate headquarters in San Diego, California.

Energy Business Valued at Over $25 Billion

The move comes as a part of a series of business deals announced in December last year to put Sempra’s non-utility infrastructure investments under a single self-financing platform and allow Sempra LNG and IEnova to join forces.

Once this business transaction is closed, Sempra Infrastructure will hit a business valuation of roughly $25.2 billion, including anticipated asset-related debt at closing of $8.37 billion. The business deal with KKR should enable Sempra Energy to grow its balance sheet with a debt cut “and with less need to issue further parent debt to fund the equity needs of its utility subsidiaries,” said senior credit analyst Jaimin Patel.

Sempra LNG is one of the leading liquefied natural gas (LNG) export infrastructure companies, while IEnova is among the largest private energy groups in Mexico as well as a top developer and operator of renewables and natural gas infrastructure there. The new platform is meant to prompt growth, combine strengths, and emphasize value.

"Over the next decade, we expect the energy markets in North America to continue to grow and become increasingly integrated. Combining our resources with KKR improves our ability to capture new investment opportunities in cleaner forms of energy and the critical infrastructure that stores and transports it," said Jeffrey Martin, chairman and CEO of the energy company.

The US-based private equity company plans to invest in the energy company via its Global Infrastructure Investors Funds. Since KKR started its Global Infrastructure strategy in 2008, it has become one of the leading investors in infrastructure in the world with a team of over 50 investment experts. Last month, KKR was reportedly seeking to raise $12 billion for its fund.

At the moment, KKR manages more than $27 billion in infrastructure assets and has carried out more than 40 infrastructure investments.

"Investing in critical new energy infrastructure creates jobs, delivers reliable energy with fewer emissions, and supports North America's economic recovery," said Raj Agrawal, KKR Partner and Global Head of Infrastructure.

The deal between Sempra and KKR is expected to close by mid-2021, depending on customary closing terms and regulators. Back in December 2020, the energy company announced its plan to buy out minority investors in Mexico’s IEnova in a business deal worth about $2 billion.

Sempra Infrastructure Partners was created by the energy company in December with an aim to simplify and add scale to the company's North American infrastructure business. Amid other things, the company operates about four gigawatts (GW) of renewable energy generation in development, construction, or operation in Mexico.

Summary

The infrastructure energy company Sempra Energy said today it is selling a non-controlling 20% stake in its business platform Sempra Infrastructure to private equity company KKR for $3.37 billion in cash. Sempra will use the new capital to invest in US utilities and grow its balance sheet.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

Related Articles