Australia's PEP to sell Energy Developments for $1.4b
Pacific Equity Partners (PEP) has agreed to sell Energy Developments, an Australia-based provider of distributed power to the mining industry, to utilities business Duet Group for an enterprise valuation of A$1.92 billion ($1.4 billion).
The two companies, both of which are listed in Australia, have entered into a scheme of arrangement whereby Duet will pay A$8.00 in cash for all outstanding shares in Energy Developments. The offer represents a 17% premium to the six-month volume weighted average of price of Energy Developments' shares and a 44% premium to an institutional placement completed in February.
The A$1.92 billion valuation comprises an acquisition equity value of $1.41 billion plus net debt of A$512 million. The offer equates to 8.8x Energy Developments' unaudited EBITDA for the 2015 financial year.
PEP-owned Greenspark Power Holdings has a 67.1% interest in the company, while Investors Mutual holds 9.6% and Coopers Investors has 4.6%. They and other shareholders with an aggregate 4.4% stake in the business have indicated their support for the Duet transaction.
PEP acquired a 79.6% interest in Energy Developments in early 2010 - via its fourth Australia and New Zealand-focused buyout fund - paying approximately A$343 million, or A$2.75 per share. This included a 33% stake bought from New Zealand-based investment company Infratil.
"Energy Developments is a strong strategic fit with Duet. The acquisition will enhance the diversity of our operating cash flows and is expected to provide an attractive source of growth for Duet," David Bartholomew, CEO of Duet, said in a statement.
Energy Developments owns and operates a network of power stations in Australia, the US, the UK and Greece from fuel sources such as landfill gas, waste coal mine gas, natural gas and liquefied natural gas. It provided 4 million megawatt hours of energy - enough to power over 650,000 homes - in the year ended June 2015.
The company expects to generate A$218 million in EBITDA for the 2015 financial year. In 2014, EBITDA came to A$182.2 million, up 3% year-on-year. Revenue rose 5% to A$422.8 million, while net profit fell 17% to A$45.4 million. In 2010, the year PEP invested, Energy Developments posted revenue of A$263.6 million, EBITDA of A$126.8 million and net profit of A$28.1 million.
Duet, which has a market capitalization of around A$3.5 billion, invests in energy infrastructure businesses that offer stable and predictable cash flows. Assets include DBP Development Group, which owns the Wheatstone Ashburton Pipeline and the Fortescue River Gas Pipeline, and United Energy and Multinet Gas, which run electricity and gas distribution networks in the state of Victoria.
PEP is currently raising its fifth fund, which has a target of around $2 billion, not including co-investment opportunities. Other liquidity events in the last 18 months include IPOs for Spotless Group and Asaleo Care, trade sales of Peters Ice Cream, Griffin's Foods and Hoyts Group, and a final two sales of stock in Veda Group.
More on Exits
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.