US-based private equity firm Kohlberg Kravis Roberts & Co. KKR has agreed to acquire British power generation company ContourGlobal an all-cash transaction valued at £1.75bn.
The private equity firm will acquire ContourGlobal through its newly formed entity Cretaceous Bidco (Bidco).
Under the terms of the deal, ContourGlobal shareholders are expected to receive £2.63 cash for each share held, which is a premium of 36% to the last closing share price on 16 May.
The acquisition is expected to become effective in Q4 2022, subject to the conditions and further terms to the current announcement.
KKR director Ryan Miller said: “As a long-term global investor in critical energy infrastructure, KKR will work with ContourGlobal’s management team and provide the capital needed to expand its portfolio of assets, building on ContourGlobal’s leading global footprint and operational track record
“We will draw on our global platform, resources and extensive experience as an active investor in a diverse range of energy sources, including renewables, to help drive value creation in a complex portfolio.”
ContourGlobal is a wholesale power generation company that develops, acquires, owns and operates contracted or regulated power generation assets. It has nearly 6.3GW of capacity in operation in 20 countries
It operates a portfolio of 138 thermal and renewable power plants across Europe, North America, Latin America, and Africa.
According to KKR, ContourGlobal has a balanced and geographically diversified power generation portfolio across multiple technologies, with inflation-protected cash flow streams.
The power company’s existing business will offer a convincing platform for significant future organic and inorganic value-accretive growth, said KKR.
ContourGlobal president and chief executive officer Joseph C Brandt said: “That an institution of KKR’s repute would offer to acquire ContourGlobal is a testament to our people and their commitment to the CG Way – passion and commitment to continuously improve, pursue excellence and to work hard without boundaries as an integrated multinational team.
“What started in a single small office with three people in New York has grown 17 years later into a global, high-growth power generation company operating 138 power plants in twenty countries.
“Together we have built an over $6bn enterprise, and I am very proud that we have grown extraordinarily well and honoured the commitments we made to investors when we listed the company in November 2017.”