Energia Group’s owner, US investment firm I Squared, has agreed to sell the Irish power company to French private equity firm Ardian.
I Squared put the group on the market earlier this year with a reported estimated enterprise value of €2.75 billion, including net debt. Parties to the deal declined to comment on the value agreed in recent days.
The transaction is expected to be completed in the first quarter of next year, subject to customary regulatory approvals, I Squared and Ardian said in a joint statement.
Energia operates across the entire energy value chain in the Republic of Ireland and Northern Ireland, serving almost 900,000 homes and businesses. It is one of the longest-established providers of renewable electricity in Ireland, supplying approximately 17 per cent of the island of Ireland’s total electricity requirements and 20 per cent of its total wind power.
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Ardian was known to have been involved in the process at an early stage. However, it was not considered to have been one of the front-runners for Energia.
New York-based private equity group KKR and a joint bidding team comprising the Canada Pension Plan Investment Board (CPPIB) and its UK power supply business, Octopus Energy, were said to have been working on strong final offers before a deadline last Monday.
I Squared, founded 13 years ago by former executives at Morgan Stanley’s infrastructure arm, acquired Energia – then known as Viridian – in 2016 from Bahrain’s Arcapita Bank for €1 billion. Arcapita had owned the business for almost a decade.
The US firm subsequently sold a minority stake in Energia to an unknown investor the following year and set up a holding company over the business in the Cayman Islands. Ardian is acquiring 100 per cent of Energia.
I Squared has made two unsuccessful efforts to sell the company before now, in 2018 and 2020.
Energia, led by chief executive Ian Thom, reported earlier this month that its earnings before interest, tax, depreciation and amortisation (Ebitda) in its customer solutions business – which supplies electricity and gas to 898,500 households and businesses on the island – declined by 31 per cent on the year to €30.2 million as its margins contracted in the three months to June. That is its fiscal first quarter.
An Bord Pleanála gave Energia permission in March to build a data centre in Huntstown in partnership with tech giant Microsoft, adding to the investment case for parties circling the group. Energia has 50 megawatts (MW) of onshore wind projects and 657MW of solar projects in development and expected to be producing by 2030.
Energia also has plans for more than 1,200MW of solar energy projects in the pipeline over the longer term.
“Energia’s focus remains on transforming Ireland’s energy system by deploying renewables and other low carbon solutions at scale, while continuing to deliver secure and affordable energy to our domestic and commercial customers,” said Mr Thom. Energia’s management team will continue to lead the business following completion.
Ardian managing director William Briggs said: “Energia is at the forefront of the convergence between energy utilities and digital infrastructure.
“The company’s pioneering approach to combining hyperscale data centre development with new renewable energy generation will unlock significant opportunities for growth in Ireland. We look forward to working with the management team on their ambitious plans to support the decarbonisation of the entire economy.”
