(Alliance News) - 3i Infrastructure PLC on Monday said it has agreed to invest GBP191 million in SRL Traffic Systems for a 92% stake.
The Jersey-based investment company added management had re-invested to acquire the remaining 8% stake.
The investor also stated that it provided a further GBP83 million of debt financing to SRL with the intention of eventually replacing this with third party debt.
SRL Traffic Systems is a Cheshire-based traffic management equipment rental company that owns almost 13,000 items of traffic management equipment and rents these to local authorities, utilities, contractors and traffic management companies from a nationwide network of 30 depots.
3i Infrastructure said SRL is experiencing strong growth in customer demand due to an increasing number of roadworks projects. This is a result of greater spending on highway maintenance, utilities works and major infrastructure projects, it explained.
The company elaborated that the hire of traffic management equipment is increasingly favoured, because it contributes to improved safety whilst roadworks take place and concluded that SRL has "defensive" characteristics in a sector with attractive underlying market trends.
3i Infrastructure plans to use its experience of investing in UK infrastructure to support SRL's continued growth.
"SRL is an attractive core-plus infrastructure business and is well-suited to 3i Infrastructure's strategy of investing in asset-intensive companies. The business has a strong position through its extensive depot network and market-leading reputation," 3i Infrastructure Chair Richard Laing commented.
Shares were down 0.1% at 342.60 pence each on Monday morning in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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3i Infrastructure (3IN)