Centrica, the FTSE 100-listed utility, has sold its gas transportation business for £90m to private equity firm Terra Firma.
Kellen Ventures, a new company one-quarter owned by East Surrey Holdings with the remainder by Terra Firma, agreed to buy British Gas Connections from Centrica for about half of its valuations by recent press speculation.
East Surrey, which itself is under a £453m offer announced in April by Guy Hands’ Terra Firma through its Kellen Acquisitions vehicle, is paying £8m for its share of BG Connections’ equity.
The company reported operating profits of £3.9m on revenues of £8.8m last year through servicing 139,000 houses.
Investment banking boutique Hawkpoint is advising East Surrey while Citigroup is advising Terra Firma. The Office of Fair Trading said it would investigate the planned purchase for competition issues.
Separately, Inexus, the biggest UK gas transportation competitor to BG Connections, is also reportedly up for sale by private equity owner Star Capital, which it is unders-tood is being advised by NM Rothschild.