Energy Capital Partners leads $2.56bn consortium deal for Atlantica

August 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2024 Issue

Atlantica Sustainable Infrastructure is to be taken private after accepting a takeover offer which values it at $2.5bn. Under the terms of the deal, the renewable energy developer is to be acquired by Bridgepoint Group-owned Energy Capital Partners (ECP), alongside a consortium of institutional co-investors.

According to a statement announcing the deal, Atlantica will be taken private after agreeing to a $22 per share offer. The price is an 18.9 percent premium to Atlantica’s closing share price on 22 April 2024, the last trading day prior to the emergence of reports regarding a potential acquisition of the company.

The transaction is expected to close in the fourth quarter of 2024 or early first quarter of 2025,

subject to shareholder and regulatory approval. Atlantica’s largest shareholders – Algonquin Power & Utilities Corp, and its subsidiary Liberty (AY Holdings) BV, which hold a stake of about 42.2 percent – have already agreed to support the proposed transaction. According to a statement announcing the deal, Atlantica expects to continue paying its current quarterly dividend of $0.445 per share through to the closing of the transaction, subject to the approval of its board of directors at the relevant times.

“This transaction is the culmination of a thorough and comprehensive strategic review process,” said Michael D. Woollcombe, chairman of Atlantica. “After carefully analyzing all reasonably available alternatives with the assistance of external advisors over a prolonged period, our board unanimously concluded that this transaction represents the best value maximizing alternative available and that its completion is in the best interest of Atlantica and its shareholders. The support of our largest shareholder reinforces that conclusion.”

“We expect to continue executing on our growth strategy as a private company with the support of our new partners,” said Santiago Seage, chief executive of Atlantica. “ECP has a long track record and expertise in the sustainable infrastructure sector and, together with its global co-investors, will enhance Atlantica’s ability to finance and deliver growth while maintaining our focus on safety, sustainability and value creation”.

“Atlantica’s employees and management team have a long and impressive track record of maximizing value across a complex set of global assets,” said Andrew Gilbert, a partner at ECP. “ECP is excited about the opportunity to partner with the Company and to support and accelerate its growth.”

Atlantica owns diverse assets including renewable energy, storage, efficient natural gas, electric transmission and water resources across the Americas and select Europe, the Middle East and Africa markets. At the end of March 2024, the company operated renewable energy plants with a combined capacity of 2.2GW. It reported revenues of $242.9m in the first quarter of the year. Atlantica reported revenue of $1bn for 2023, down from $1.1bn in 2022, but went from a pre-tax loss of $11.7m to a profit of $37.2m.

Energy Capital Partners is a leading investor across energy transition, electrification and decarbonisation infrastructure assets.

On the same day that the Atlantica deal was announced, ECP also shared the news that it had raised $6.7bn to invest in renewables and power generation, exceeding expectations with the close of its fifth flagship fund. ECP said its ECP V (Fund V) secured capital commitments of $4.4bn plus an additional $2.3bn of co-investment capital.

The fund plans to continue investing in companies focused on power generation, renewable and storage assets and critical sustainability and decarbonisation infrastructure, according to ECP. Investors, new and existing, included public and private pensions, insurance companies, asset managers and family offices.

Richard Summerfield