French, Spanish firms eye Sempra asset

French, Spanish firms eye Sempra asset

M&A Corporate & Sovereign Strategy Project & Infrastructure Finance Peru Chile US

Spain's ACS as well as Engie and Vinci from France could present offers for the Peruvian utility company Luz del Sur, LatinFinance has heard.

"These three firms have a growing presence in Peru and could be most interested in Luz del Sur, which has a strong presence in Lima with 5m customers," said Eduardo Peláez, partner at the local advisory firm Une.

Sempra Energy has said it plans to sell Luz del Sur and its Chilean subsidiary Chilquinta Energía as it leaves South America to focus on its businesses in North America.

Luz del Sur is worth some $1.5bn and could command an EBITDA multiple in the mid- to high-single digits, significantly less than the 12 to 16 times EBITDA that Alicorp paid for the consumer goods company Intradevco.

"It was a highly strategic buy with a much higher premium than usual," Peláez said of the Alicorp deal, adding that industrial acquisitions in Peru usually fetch multiples of 10 times EBITDA.

"Luz del Sur is more of a stable play with reliable revenues but not necessarily exponential growth," he added.

San Diego-based Sempra bought 50% of Chilquinta and 42% of Luz del Sur in 1999. It took complete ownership of Chilquinta and 83.6% of Luz del Sur in 2011. It has said that expects to sell its stakes in both companies by the end of the year.