Ebitda Multiple Comps: $1.77bn for Scottish Energy Transmission Stake

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Ebitda Multiple Comps: $1.77bn for Scottish Energy Transmission Stake

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February 7, 2023 9:37 pm

SSE plc has sold a 25% stake in its SSEN Transmission SPV, which operates the energy transmission network in the north of Scotland, to Ontario Teachers’ Pension Plan Board for $1.77bn.

The deal was completed in December 2022 and achieved a price-to-sales of 9.16. This is above the 3.1 average for UK network utilities sales (absolute last five-year mean), according to infraMetrics®.

Based on our data, network utilities saw a 38% increase in their deal value in 2022 when compared with 2021, largely driven by electricity transmission and distribution companies. This increase has been fuelled by the supportive ESG policies that drive the investment of network transmission for renewable integration and decarbonisation.

The price reflects the current value of the business and its growth potential. According to the Financial Times, SSE says its gross regulated asset value (RAV) will exceed £12bn by 2031, up from a current £5bn, which would translate to a 140% jump within eight years. The quoted EV/EBITDA ratio for the deal is 17x. In infraMetrics, the 25-75% valuation quartiles correspond to an EV/EBITDA ratio of 9.4x-17.8x. As a result, we conclude that this is a reasonable price to have achieved for the asset.