National Toll Roads (NTR) won shareholder approval to take a controlling stake in Celtic Utilities, a leading operator in the environmental infrastructure sector, at an extraordinary general meeting yesterday.
The acquisition of the 76.9 per cent stake from entrepreneur Mr John Gallagher values Celtic Utilities at €62 million. Mr Gallagher accepted the offer from NTR - which owns the Westlink and Eastlink toll bridges in Dublin - last month.
The deal comprises 943,767 ordinary shares in NTR, a convertible/redeemable loan note with a par value of €38.4 million and €1.1 million in cash.
As part of the deal, Mr Gallagher, who is chairman of Celtic Utilities, will join the board of NTR as a non-executive director and will continue to play a role in the development of Celtic Utilities.
Existing shareholders in Celtic Utilities, ICC Equity Partners, will retain the balance of the equity.
"The acquisition of Celtic Utilities will consolidate our position as the leading developer of public infrastructure in Ireland. NTR will now hold leading positions in the roads, waste management, energy and water/wastewater sectors in Ireland," said Mr Jim Barry, chief executive of NTR.
Since it was set up in 1978, NTR has developed from road infrastructure and toll operations into waste management and energy generation with Eirtricity, a joint venture with Future Wind Partners, which operates in the renewable energy sector. The company has also formed a consortium, Celtic Roads Group, which will compete for the new road public private partnerships announced by the National Roads Authority.
The acquisition of Celtic Utilities will increase NTR's effective shareholding in Celtic Waste to 88 per cent and provide the company with an effective 38 per cent in Celtic Anglian Water, a joint venture between Celtic Utilities and UK company AWG.
Mr Barry said that the acquisition of Celtic Utilities and the NTR's development into broad-based infrastructure had not stretched its management capabilities.
"I agree that they are very complex and difficult businesses," he said. "I wouldn't agree that they are all different. There are very strong competencies that overlap the businesses. If you're talking to a county manager, you're talking to the same man whether it is a landfill, a road, a water plant or a windfarm. There is massive overlap on the public policy area of regulatory affairs, and massive overlap on the financial credibility in relation to banks."
The Celtic Roads Group, the consortium in which it is a partner with Dragados of Spain and HBG of The Netherlands, has been shortlisted for the first two new road PPPs - Kilkock to Kinnegad, and the Waterford bypass. Dragados is one of Spain's largest civil engineering contractors and one of the world's leading toll road operators, while HBG is parent of HBG Ascon, one of Ireland's leading road contractors.
Mr Barry described managing the planning process as one of the "key competencies of the group".
Eirtricity, NTR's joint venture with Future Wind Partners, has submitted its proposals for the first phase of its planned 500-750 MW off-shore windfarm on the Arklow Bank and is nearly two years ahead of other developers in the development of off-shore windfarms, Mr Barry said. But to have the project up and running by the end of next year, it would need Government support, he said.
