OMERS to sell US Infrastructure Corporation

OMERS’ private equity arm plans to sell the North American utility locator service three years after acquiring the company for a 3.5x return.

The Ontario Municipal Employees’ Retirement System’s private equity portfolio will sell US Infrastructure Corporation to Leonard Green & Partners, according to a statement from the pension fund.
Financial terms weren’t disclosed; however, a person with knowledge of the transaction pegged OMERS’ return at about 3.5x its original investment.

OMERS Private Equity bought USIC in May 2010 for just under $300 million, Michael Graham, OMERS’ senior managing director, told Private Equity International.

“We’ve done a lot with the business. We’ve hit our five year plan for the company in a much tighter timeframe than we expected,” said Graham. “As a result this was a strong performer for us, so we felt it was a good time to bring it to the market.”

Graham of OMERS

The transaction is expected to close in the third quarter, according to the statement. Harris Williams and Barclays Capital are the transaction’s financial advisors.
USIC was OMERS’ second investment made from the system’s New York Office, after it opened in 2009. Its first was rail services and maintenance company Nordco.
During its ownership, OMERS supported USIC’s acquisition of Consolidated Utility Services in 2011, according to the statement. Two smaller acquisitions were also made, which helped USIC’s revenue to grow by 65 percent, the statement read.

OMERS isn’t currently considering investments in other utilities services companies but won’t rule it out in the future. “The utilities services space broadly has a lot of tailwinds, which relate to outsourcing that is continuing to occur, as utilities strive to drive low-costs,” Graham said.
OMERS Private Equity has more than C$6 billion of investments under management, the statement read. The Toronto-based group focuses on investments in North America and Europe. In 2012, OMERS generated a 19.2 percent return, which was driven by its direct investments, PEI previously reported.
Los Angeles-based Leonard Green has over $15 billion of private equity capital, raised since its inception, according to the statement.