Deal details: The deal value includes the assumption of ~$124mn of net debt. The enterprise value represents an 8X multiple to the platform’s projected EBITDA for 2023, implying an annual EBITDA of $88mn. The transaction covers 12 operational wind projects totaling ~420 MW, commissioned between 2005-2012. The power plants operate under the Spanish regulatory regime, with a weighted average remaining contractual life of ~6 years. Additionally, the deal includes 435 MWp of wind + solar hybrid projects that are in the late stages of development.
Deal rationale: We believe that Ardian bought into the portfolio to tap into the contracted, stable cash flows linked to the projects. The company acquired the assets in Aug’19 from Spanish power company Renovalia Energy for $609mn, representing a deal multiple of $1.45mn/MW. In the current transaction, Enerdatics estimates that Ardian divested the operating portfolio to Naturgy at a similar valuation, as the potential for re-powering and stable cash-flows for the remaining contractual term offsets the depreciation in asset value due to declining turbine efficiency and higher operations and maintenance (O&M) costs. Additionally, Ardian was able to secure an attractive multiple of more than $0.2mn/MW on the wind + solar development pipeline, driven primarily by the higher capacity factor for hybrid projects due to lower intermittency issues. For Naturgy, the acquisition enables it to access a large renewable energy portfolio operating in the regulated market, and a high-efficiency renewable energy project in the late stages of development.
Other PE exits: KKR recently exited its solar platform X-Elio after eight years of possession by selling its 50% ownership to Brookfield for $1.8bn. The transaction represented a ~260% return on KKR’s initial purchase price. Another major transaction in the space includes Green Tie Capital's divestment of a 2 GW solar portfolio to Shell.
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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