KKR and Mitsubishi Corporation (MC) have entered into an agreement by which a 25% stake in South Staffordshire Plc, currently owned and controlled by KKR’s infrastructure funds and other accounts, will be sold to MC.

South Staffordshire Plc is comprised of a regulated water company, South Staffordshire Water Plc (SSW), the statutory supplier of water in South Staffordshire and Cambridge in the UK, as well as several entities which provide non-regulated water-related services throughout the country.

The non-regulated businesses, including Echo Managed Services and SSI Services, have expanded their services across the UK.

Jesús Olmos, Chairman of South Staffordshire Plc and Head of European Infrastructure at KKR, said:

“KKR has built a strong track record of investing in infrastructure, including in water supply and distribution. South Staffordshire Plc has established a reputation of providing excellent quality water, through a secure and reliable supply, with high levels of customer service, fair pricing and environmentally sustainable operations. We look forward to the partnership with the Mitsubishi Corporation to support South Staffordshire Plc and its management in maintaining its reputation as a first-class operator.”

Masaji Santo, Senior Vice President, Division COO, MC, said:

“This investment opportunity marks MC’s first step into the European regulated infrastructure market. We view it as an attractive investment into a well-established regulatory environment with a highly reputable investor KKR. UK’s regulated water sector is regarded as the world’s most advanced water privatization model and we believe our participation in SSW’s operations will enhance MC’s presence in the rapidly growing global water market. In addition, South Staffordshire Plc is uniquely characterized by its strong non-regulated business arms, for which MC would create synergies with MC’s existing water business assets.”

The proposed transaction between KKR and MC, through which MC will indirectly acquire 25% of South Staffordshire Plc’s shares, is subject to customary approvals. No financial terms were disclosed.