Singapore renewables developer Equis Energy acquired for US$5b in cash
Singapore
IN WHAT is said to be the largest deal in history for the renewables sector, infrastructure fund manager Global Infrastructure Partners (GIP) is leading a consortium to acquire Singapore-based renewable-energy developer and operator Equis Group for US$5 billion in cash.
The deal, which includes US$1.3 billion in debt, is expected to close in the first quarter of next year, said both companies.
This comes after Equis, the largest renewable-energy independent power producer in the Asia-Pacific, appointed banks for a strategic review of its assets in April. Bloomberg had reported in August, citing unnamed sources, that the group was pursuing a sale after delaying its plans for an initial public offering of its operational assets.
Royal Dutch Shell, Softbank and infrastructure investor I Squared Capital are said to have considered bidding for the company, which was set up in 2011 by a group of senior executives who previously managed private equity and infrastructure funds at Australia's Macquarie Group.
Equis owns a 1.9-gigawatt (GW) portfolio of renewables assets that are under operation and construction, including those for solar and wind in countries such as Japan, Australia, Indonesia, the Philippines, India and Thailand. These operating assets are underpinned by fixed, long-term offtake agreements, and so generate stable earnings, said the two companies. Equis also has a long-term development pipeline of more than 115 projects amounting to 9.1 GW. (For perspective, Singapore's monthly peak electricity demand stands at 7,000 megawatts.)
Asia is the largest renewable-energy market, and is expected to grow faster than any other region. Despite lower oil prices, Asian governments are still keen on harnessing renewable energy for the energy security and predictability in electricity prices that it provides, Equis chief executive David Russell told The Business Times in an interview last year.
The operations of the company, which employs over 300 professionals, covers the entire renewable project value chain, from origination, permits and design to procurement, construction, financing and operations.
The acquisition is made through the fund Global Infrastructure Partners III, which makes equity investments in infrastructure assets in the energy, transport and water and waste sectors. It is done in conjunction with Public Sector Pension Investment Board - one of Canada's largest pension investment managers with about C$135.6 billion of net assets under management - and China's CIC Capital Corporation, as well as a group of other co-investors.
GIP chairman and managing partner Adebayo Ogunlesi described Equis Energy as a strong fit with GIP's global renewable investment strategy. He said in a statement: "Equis Energy is a unique success story in the Asia-Pacific region, as it has systematically executed its growth strategy since its founding five years ago.
"In that period, it has become one of the leading renewable-energy platforms in the region, with a best-in-class business model, a high-quality asset portfolio and an outstanding management team."
Equis CEO Mr Russell said the investment by GIP and its partners is exciting news for the development of renewable energy in the Asia-Pacific.
"GIP has a strong track record of managing and growing utility-scale infrastructure businesses, and the combination of experience and knowledge across GIP and the existing management team will enable Equis Energy to continue expanding competitively across its target markets."
Credit Suisse (Singapore) Limited and JP Morgan (South-east Asia) Limited were the financial advisors for Equis Energy; Skadden, Arps, Slate, Meagher & Flom LLP were its legal advisors.
Clifford Chance LLP advised GIP.
