Privately-funded infrastructure and energy deal volume globally jumped by more than 50% YoY during the first quarter of 2022, according to Infralogic data, even as the number of transactions declined. The overall transaction volume grew to USD 236.2bn from USD 155.6bn in 1Q21, while the number of deals reaching financial close dropped to 642 from 675:
M&A activity drove growth, while the bottom fell out of the Greenfield market. M&A transaction volume grew to USD 130.3bn from USD 59.8bn in 1Q21 — helped by four USD 10bn+ transactions, including the AUD 32bn (USD 23.46bn) sale of the Sydney Airport and USD 15.5bn divestment of a minority stake in the Saudi Aramco gas pipeline.
Greenfield deal volume, meanwhile, slid by more than 30% from 1Q21 to USD 28.6bn — the worst first quarter for greenfield transaction volume in the past 10 years — and represented only 12.1% of overall 1Q22 transaction volume.
With volumes reaching USD 52.6bn, Australia took first place in Infralogic’s All-Sector location ranking by market value due in part to the Sydney Airport sale. But the country’s showing was certainly aided by the AUD 10.1bn (USD 7.5bn) acquisition of Australian electricity and gas distributor AusNet by a Brookfield-led consortium, and GIP’s USD 4.83bn purchase of a 49% stake in the Pluto Train 2 LNG facility — confirming the appeal of the Australian market to foreign investors.
The US placed second with USD 50.7bn in dealmaking activity, up from USD 35.2bn in 1Q21. Italy reached the podium in third place, confirming itself as a hot market in the sector. Large telecommunications and renewables deals drove Italian dealmaking to USD 27.6bn.
Telecommunications was the top-performing sector in the first quarter, with USD 55.1bn in dealmaking accounting for 23% of market share by value. Telecoms sector activity almost quadrupled YoY.
Major M&A deals in the sector include the USD 15.32bn acquisition of CyrusOne’s US business by GIP and KKR, as well as Cellnex’s EUR 10bn (USD 11.06bn) purchase of CK Hutchison’s European telecoms towers portfolio. In financing, Italy’s Open Fiber refinanced its debt in a EUR 7.18bn (USD 8.11bn) transaction, while Danish company TDC raised EUR 3.33bn (USD 3.73bn) in debt.
The transport sector ranked second with USD 53.05bn in deal volume, of which nearly half was the USD 23.46bn Sydney Airport sale.
The overall decline in 1Q22 greenfield activity can be attributed in part to a massive 60.4% first-quarter YoY decline in renewables greenfield deal activity to USD 6.05bn from USD 15.28bn in 1Q21.
Both equity and debt investment in the sector fell, especially in big markets. In North America, lenders’ contributions crashed to USD 351m from USD 1.068bn in credit facilities allocated to the sector in the year-ago quarter. Overall renewables transaction activity fell 12.3% YoY in 1Q22.
