Private equity firm 3i Infrastructure has agreed to sell its stake in Anglian Water Group (AWG), the parent company of Anglian Water.

The sale, which is expected to take place early next year, is likely to generate proceeds of £395 million, according to 3i Infrastructure. The company said it compares to a valuation of £288 million at 30 September 2017.

Its stake will be acquired by Dalmore Capital and GLIL Infrastructure (a joint venture between five local government pension funds). Dalmore already holds a stake in the Thames Tideway super sewer and the gas network operated by National Grid.

3i Infrastructure bought its interest in Anglian Water in 2007, following the take private of AWG in 2006 by a consortium of investors.

In the period since the original acquisition, AWG has invested more than £4 billion to replace ageing infrastructure, improve resilience and address the imbalance between supply and demand, 3i Infrastructure said.

Richard Laing, chairman of 3i Infrastructure, said: “AWG was part of 3i Infrastructure’s seed portfolio and has proved a good investment for the company over the past ten years. We believe that now is an appropriate time for the company to realise its stake.”

Phil White, managing partner and head of infrastructure, 3i Investments, added: “We would like to thank CEO Peter Simpson, his management team and the staff at AWG for their dedication and achievements during our period of ownership, supported by the 3i team and our co-shareholders. AWG is an exceptional company and we wish the team well for the future.

“We have developed a good pipeline of potential opportunities for 3i Infrastructure that are consistent with the company’s return objectives, and we expect to progress several of these over the coming months.”

3i Infrastructure’s 10.3 per cent stake is held by 3i Osprey LP alongside a further 4.7 per cent held on behalf of other investors. 3i Osprey LP is selling its entire 15 per cent stake.

News of the sale follows reports earlier this month that Yorkshire Water had been put up for sale after investors planned to offload controlling stakes in its parent company, Kelda Group.

Two of its investors, Deutsche Asset Management and the private equity fund Corsair Capital, are thought to be selling their stakes, which together amount to a majority of almost 55 per cent and are worth an estimated £4 billion.

Yorkshire Water and Thames Water both recently announced plans to close their arrangements in the Cayman Islands.

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