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$1.5bn Acquisition: Private Equity (PE) investment powerhouse EQT acquired 100% of Sweden-based solar and wind developer OX2 for an enterprise value of $1.5bn, in a take-private deal. The purchase involves a 34 GW pipeline of early-stage and under-construction solar, onshore wind, offshore wind, and battery projects across Sweden, Finland, Estonia, Lithuania, Poland, Romania, France, Spain, Italy, Greece, and Aland.
19X EBITDA Multiple: The deal represented an EV/Last-Twelve-Months (LTM) EBITDA multiple of 19X, which is at the higher end of the valuation range observed for recent PE-led acquisitions in Europe. Enerdatics notes that the partnership between a PE firm and an established developer leads to an alliance that is well capitalized to progress a GW-scale pipeline, while simultaneously adopting a more integrated operating model with opportunities to tap additional income streams across the project development value chain
Emergence of Take-Private Deals: An Associate Director at Warburg Research recently commented:
“As long as markets are concerned about possible short-term obstacles for renewables stocks, private equity investors will take the opportunity to take them private and maintain a buy-and-build strategy. The main difference should be the time perspective. Whilst markets tend to overvalue short-term triggers (i.e. 3-9 months), [private equity firms] usually have a longer time horizon and no mark-to-market valuation at any day a year. That somewhat fits the renewables industry, which is caught in very long investment/lifetime cycles due to its underlying assets."
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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