ECP's Acquisition of Atlantica Represented the Highest EBITDA Margin Among Utility-Focussed Acquisitions in US, since 2022
The Deal's EBITDA/Revenue Multiple of 0.71 Surpassed That of RWE's $6.8bn Takeover of Con Edison's Clean Energy Business in 2022, Which Stood at 0.58
Energy Capital Partners (ECP) has acquired Atlantica Sustainable Infrastructure for an EV of $7.6bn. Atlantica holds 2.2 GW of operating renewables capacity largely in North America, as well as in South America and EMEA. The company also has a 3.8 GW renewables and storage development pipeline, coupled with operating transmission assets, gas-fired plants and water treatment facilities
0.71 EBITDA Margin: Enerdatics believes that Atlantica's EBITDA margin is driven by stable and predictable cashflows, which are either long-term contracted or regulated. The company recently stated that more than 50% of its annual revenue is non-dependent on natural resources, and ~92% of its project debt has interest rates that are fixed or hedged. Additionally, Atlantica recently internalized its solar O&M division in Spain, improving operational savings further and optimizing expenses
6.4X Net Debt/EBITDA: Enerdatics notes that ECP's acquisition of Atlantica represented the highest Net Debt to EBITDA ratio among recent utility-focused takeovers. However, ~80% of the company's liabilities comprise non-recourse project debt held by ring-fenced SPVs, with a debt service coverage ratio of 1-1.25X. Additionally, the net debt/CAFD is expected to be 3.9-4X during 2023-2026, modestly higher than previous years but in-line with ratings and management's commitments
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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