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Macquarie, Ausgrid line up for AGL Energy's smart meter sale

Macquarie, Ausgrid line up for AGL Energy's smart meter sale

A big line up of second-round bidders is preparing for the final furlong in AGL Energy's smart meter auction, which is due to kick off in three to four weeks.

Street Talk understands those that made the binding and final bid stage include NSW electricity distributor Ausgrid, Macquarie Group, KKR & Co's Calvin Capital and New Zealand's Metrix.

It appears New Zealand's Vector did not make the second round, which will not start until late August or early September.

Ausgrid, now majority owned by AustralianSuper and IFM Investors, is said to be running its transaction team inhouse, while HSBC is advising Calvin Capital and Deloitte has a close relationship with Metrix.

Up for grabs is the AGL Active Stream digital meters business, which has about 180,000 meters in operation and an another 200,000 or so in the works.

AGL's auction is being run by boutique firm Ironstone Capital and sources have suggested the business could be worth around $100 million.

The suitors will no doubt be figuring out their financing structures ahead of the sale coming to a head.

The national market for smart meters, outside Victoria, is in a state of flux as industry players seek to get ahead of market reforms that will be implemented in December.

The changes will introduce national standards that encourage new businesses to enter the market and expedite the usage of smart meters.

The thinking is that several players are looking to exit the space to side step the capital expenditure that comes with installing and processing a large roll-out of smart meters. There are also operational expenses in addition to the capex.

The Australian market, excluding Victoria which has its own smart meter roll-out program, is estimated to have about 10 million meters.

The other live sale process in the industry is being executed by Origin Energy.

As first reported by this column, Origin is considering a divestment of its smart meter business which spans its specialist Acumen unit as well as other areas including installations. Bank of America-Merrill Lynch has been appointed to manage the process.

More than 90,000 smart meters had been installed by Acumen as at Origin's interim results.

Australian Financial Review

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