Selettra represented the leading public lighting operator in Southern Italy, operating in more than 50 cities and with a portfolio of about 150,000 lighting points under management.
Fund I entered the company in 2018 investing Euro 24.5 million through the acquisition of shares from existing shareholders and the subscription of capital increases and a convertible bond owning a stake of the share capital equal to 62.9%.
In May 2023, Fund I completed the sale of the stake to Patrizia Infrastructure Ltd.
Sourcing and Investment Rationale
- Leading company in Southern Italy with strong potential to become a Smart City platform. At entry, the company managed c.50,000 lighting points with ambitions to double this amount supported by tenders already awarded.
- Long-term contracts with municipalities deriving from the awarding of project financing tenders (with a duration of 15 to 20 years) insulated from inflation and energy cost volatility
- Family owners and operators needed access to financial resources to finance the next stage of growth. FIEE was positioned as a partner of choice for the next stage of growth given familiarity with the sector and prior relationship with family owners.
- The transaction was negotiated on a fully bilateral basis
Value Creation
- Introduced ancillary services (e.g., remote control, 5G and smart mobility) to transform Selettra into a Smart City platform
- Light points under management growth from 50,000 to about150,000 (c.2.5x growth) and stabilization of the financial profile
- Strengthened relationships with municipalities by offering strong expertise in carrying out revamping and energy efficiency focused interventions
- Equipped Selettra with certifications and SOAs to enhance public tender participation outcomes
- Strengthened the management team by appointing a new CEO and a new CFO
- Attractive refinancing package, including a Euro 22 mln facility (capex + working capital) with a long tenure (14 years), was arranged prior to start the exit process to sell a fully funded business plan
Exit and Returns
- In May 2023, Fund I completed the sale of the stake to Patrizia Infrastructure Ltd.
