ICG Infrastructure is in talks to buy the UK airports of Rigby Group in what could become its first investment in the sector.

The infrastructure arm of Intermediate Capital Group (ICG) is in bilateral negotiations with family-owned Rigby Group to acquire Bournemouth, Exeter and Norwich airports, which last year served around 1.8 million passengers, said sources.

ICG Infrastructure is working with financial advisor Gleacher Shacklock on the deal, one of them added.

The talks come after Rigby Group, the technology and real estate-focused holding company of entrepreneur Sir Peter Rigby, last year appointed Rothschild to find a buyer for the airport business, which also includes two private jet bases at Liverpool and Birmingham airports.

ICG and Rothschild declined to comment, while representatives for Rigby Group and Gleacher Shacklock did not respond to requests for comment.

The valuation being discussed for the airports, which generated around GBP 20m of EBITDA in the last financial year, is not known. Sources however said it is likely to be lower than the 20x-plus multiples of recent major UK airport transactions, as Rigby Group’s assets are smaller, regional facilities.

ICG is seeking to raise nearly GBP 100m of debt to help finance the takeover, according to the sources.

Mixed recovery
Bournemouth Airport is the largest in the portfolio, accounting for nearly 1 million passengers and more than half of the combined assets’ EBITDA last year, according to Rigby Group’s latest accounts and a sale teaser seen by Infralogic. It is also the fastest growing, with passenger numbers 20% higher than pre-Covid levels.

Exeter and Norwich airport are still struggling to bounce back from the pandemic, having also suffered the impact of the collapse of regional UK airline Flybe in 2020. Exeter Airport last year served 435,000 passengers, about 54% below pre-pandemic numbers, while Norwich Airport’s 353,000 annual passengers were still 30% short of 2019 figures.

Rigby Group has been working to add new summer routes with carriers such as Ryanair and TUI to help the airports recover, however, as well as boost cargo flights.

Uptick in M&A
If negotiations are successful, the deal would be the first airport investment for ICG Infra, which has mostly invested in renewable energy and digital infrastructure since its establishment in 2018 by a team led by Guillaume d’Engremont.

The firm is currently raising its second infrastructure fund, which recently hit its EUR 2bn target and is expected to close towards June.

The possible deal for Rigby Group’s airports comes amid a pick-up of airport M&A activity in the UK and Europe more broadly after a long pause during and after Covid.

A consortium led by Saudi Arabia’s Public Investment Fund (PIF) is in talks to buy a minority stake in Newcastle Airport, while some of the owners of London City Airport are looking to offload their stakes, in other ongoing deals.

PSP Investments-controlled AviAlliance last year agreed to buy AGS Airports, the operator of the Aberdeen, Glasgow, and Southampton airports, while Vinci Airports acquired a majority stake in Edinburgh Airport, in two separate deals agreed at valuations of more than 20x EBITDA.

Ardian Infrastructure and PIF have meanwhile teamed up to buy a large stake in Heathrow, the UK’s largest airport.