Japan’s Orix to acquire 22% of PE-backed Ormat
Japanese financial services group Orix Corp. has agreed to buy a 22.1% stake in Israeli geothermal energy producer Ormat Technologies for $627 million from an investor group led by PE firm FIMI Opportunity Funds.
According to a statement, the Japanese investor will buy 11 million shares for $57 apiece from FIMI, Bronicki Investments, an investment entity owned by the company’s founder, and several members of senior management. The deal is expected to close in the third quarter, pending regulatory approval.
US-listed Ormat builds geothermal and recovered energy generation power plants based on a self-developed energy converter. It has so far installed more than 2,200 megawatts (MW) in gross capacity globally, mainly from geothermal, and generated 727 MW in the US, Kenya, Guatemala and Guadeloupe.
Under the agreement, Ormat will have exclusive rights to develop equipment for Orix geothermal energy projects in markets outside of Japan, and serve as a technical partner and co-investor on Japan-based projects. Orix will also help the company obtain financing for its geothermal projects.
Gillon Beck, Ormat's chairman and a senior partner at FIMI, said the collaboration with Orix will accelerate Ormat’s growth, particularly in Asia. The Israeli GP firm bought approximately 11.7% shares of Ormat from Bronicki Investments for ISL297 million (then $78 million) in 2012. As of the end of February, it held a 13.39% stake, while Bronicki owned 7.11%.
“We recognize the importance of having clean, reliable, baseload power such as that which geothermal provides, and we believe that the geothermal sector has the potential to become an increasingly large component of the world’s overall energy mix,” added Yuichi Nishigori, head of the energy and eco services business at Orix.
Orix operates a diverse portfolio of businesses including energy, private equity, infrastructure, automotive, ship and aircraft, real estate and retail financial services. It has offices in 36 countries and regions around the world.
Since its establishment in 1996, FIMI has raised six funds and has more than $3 billion in assets under management. It has invested in 83 companies and recorded 52 exits with total transaction value of more than $4.5 billion.
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