The U.S. House of Representatives finally passed the infrastructure bill over the weekend, and President Biden is expected to sign it next week. It’s sure to be a boon for private equity. Mergers & Acquisitions reached out to many dealmakers today for their reaction, and we’d love to hear from more of you.
“We believe the infrastructure sector will continue to benefit from long-term, secular growth,” Mel Bartoul, a director at Monomoy Capital Partners, tells Mergers & Acquisitions. “In the United States, the deterioration of our aging infrastructure will require significant spending for many years to come to continue to support economic growth and productivity.”
Earlier in November, Monomoy announced a deal to acquire Trinity Highway Products from Trinity Industries for about $375 million. The target is a manufacturer of highway safety products such as crash cushions, guardrails and truck-mounted attenuators.
“The bill includes programs that will improve the nation’s roads and bridges, repair more than 24,000 buses and 5,000 rail cars, and construct new electric-charging infrastructure,” Alvarez & Marsal managing director Jay Moody tells us. “Those projects will require construction and maintenance services. Many private equity sponsors already own successful businesses that serve these markets and will see an increase in demand for their services.”
One deal expert says PE can benefit from the infrastructure bill in other ways besides M&A. “Private equity investors are doubly well-positioned to contribute to the success of the infrastructure package,” CohnReznick managing principal Jeremy Swan tells us. “Adding their financial capital to public capital will increase total resources to support the various plan components, thereby adding an accelerant for public infrastructure programs and investment. Given that private capital could be available much more quickly than public capital, PE could be an important accelerant for the program.”
“We plan to continue to look for other deals in the infrastructure sector, given the favorable, long-term macro tailwinds,” says Bartoul.
Are you a PE investor looking for infrastructure deals? I’d love to hear from you. Please e-mail me at: [email protected].
– Demitri Diakantonis