OMERS Taps Banks for US Infrastructure Corp Sale -Sources

(Reuters) – The private equity arm of OMERS, one of Canada’s largest pension plans, has hired Barclays Plc and Harris Williams & Co to explore a sale of United States Infrastructure Corporation (USIC), three people familiar with the matter said this week.

The Indianapolis-based infrastructure services company, which maintains the underground cables of telecommunications, power and water utilities, could be valued at around $800 million based on annual earnings before interest, tax, depreciation and amortization (EBITDA) of about $100 million, the people said.

USIC and OMERS declined to comment, while spokespeople for Barclays and Harris Williams did not respond to requests for comments. The sources asked not to be named because the process is not public.

The niche market for utility line-locating services was valued by Standard & Poor’s Ratings Services at $1.6 billion last year.

USIC was formed in 2008 when private equity firm Kohlberg & Co acquired and merged two companies active in the underground locating and marking service sector – SM&P Utility Resources Inc and Central Locating Service Ltd.

In just over a year, USIC’s EBITDA had grown by 65 percent, according to Kohlberg’s website. In 2010, Kohlberg sold USIC to OMERS Private Equity for an undisclosed amount. It was OMERS’ second private equity deal in the United States following its acquisition of rail maintenance equipment company Nordco Inc in 2009.

OMERS Private Equity has over $6.5 billion of assets under management and has been carrying out investments since 1987. In 2012, it posted returns of 19.2 percent, strongly outperforming the total portfolio of OMERS, which reported a 10 percent return. OMERS has total net assets of over $60 billion.

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