KKR to acquire Encavis for €2.8bn

June 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

June 2024 Issue

In deal that that values the German developer at €2.8bn, private equity firm KKR, through its investment vehicle Elbe Bidco, is to acquire electricity and renewable energy producer Encavis.

Under the terms of the deal – which is expected to close in the fourth quarter of 2024 – Elbe Bidco will offer a cash consideration of €17.50 per Encavis share.

As part of the transaction, BidCo will launch a voluntary public takeover offer for all outstanding free float shares of Encavis, with Viessmann Group, Ababcon Capital and other shareholders also investing in a KKR-led consortium.

“Unlocking the full potential of renewable energy requires expertise as well as substantial long-term capital,” said Vincent Policard, partner and co-head of European infrastructure at KKR. “We are pleased that KKR’s strategic investment will provide Encavis with the necessary long-term financial resources at a pivotal time for the company and position it to seize emerging opportunities and solidify its strength in the clean energy landscape.”

Operating a portfolio of more than 190 solar photovoltaic and more than 40 onshore wind farms with a current operating capacity of around 2.2GW across 10 European countries, Encavis is a strong independent player in key markets such as Germany, Spain, Denmark, Italy and France.

Furthermore, the company demonstrates a proven capability across the entire value chain of construction, financing, operation and in-house maintenance. With KKR’s and Viessmann’s support, Encavis is poised for an accelerated growth across all these segments.

“We are convinced that Encavis has great potential,” said Tobias Krauss, chief executive of Abacon Capital. “We want to increase and accelerate its realisation. This requires strong partners – and we have now found them. The group of investors led by Ababcon therefore supports KKR’s offer and welcomes KKR and Viessmann’s entry.”

The strategic partnership between KKR, Viessmann, Ababcon and Encavis not only positions Encavis as a leading German player in the energy transition, but also supports the broader renewable energy transition across Europe. Encavis is well positioned to benefit from ambitious national and international plans for solar and wind expansion.

Additional financial support from KKR and Viessmann will further enable Encavis to bolster its project development pipeline, increase capacity and facilitate expansion into new markets. In addition, KKR, Viessmann and Ababcon fully support the current growth strategy of the management team.

“Over the past years, Encavis has grown into one of the leading independent power producers in Europe and has strong ambitions to further continue on this growth path,” said Christoph Husmann, chief financial officer at Encavis. “With KKR and Viessmann, we aim to bring partners on board who share the same long-term and entrepreneurial approach and extensive experience of investing behind the energy transition.”

Acting as financial adviser to KKR is PJT Partners, with Latham & Watkins and Hengeler Mueller acting as legal advisers.

The transaction is subject to various customary offer conditions, including the receipt of regulatory, antitrust and foreign direct investment approvals.

Dr Husmann concluded: “We are convinced that with the additional financial and strategic support, Encavis will be able to leverage our assets and competences and take our business to the next level to compete with the largest European players.”

Fraser Tennant