New York-based private equity firm I Squared Capital has agreed to acquire Irish energy company Viridian Group Holdings Limited from Arcapita, reportedly for €1 billion.
The deal provides for ISQ Global Infrastructure Fund to acquire 100% of Viridian in an all-cash transaction, which is expected to close during the second quarter of 2016.
I Squared Capital has also undertaken to pay down £145 million in Viridian’s existing junior debt with new equity at closing.
I Squared, which owns renewable energy assets in the US and India, was founded in 2012 by Sadek Wahba (partner and managing director) and Gautam Bhandari, PhD (partner), both former senior executives at Morgan Stanley Infrastructure Partners. The firm has $3.8 billion of assets under management.
The Irish Times reported earlier this month that the State-owned Ireland Strategic Investment Fund stepped back from its involvement in a consortium bidding for the energy provider as a result of a failure by the Dáil to elect a new Government. The owners of Bord Gáis Energy and Airtricity were also believed to have submitted bids for Viridian, which was put up for sale by Arcapita Bank in December.
Viridian is a leading independent, integrated energy company operating in Ireland. With over 480 employees, the group comprises two main brands Energia and Power NI, and “has a c.20% share of domestic electricity sales volume and a c.27% share of business electricity sales volume on an all-Ireland basis,” says the company. With an annual turnover of circa €2 Billion, the Viridian Group is one of Ireland’s Top 50 Businesses. The company is headquartered in Belfast, Ireland.
Viridian’s generation portfolio consists of 747 megawatts of gas-fired combined-cycle generating technology capacity and 225 megawatts of onshore wind assets in operation and construction. In addition, Viridian has 793 megawatts of operating wind-farms under long-term contracts which is expected to increase to c.1,000 megawatts in just over a year as other wind-farms, currently under construction and in-development, become operational.
“Viridian has an attractive mix of diversified businesses with significant overlap with our areas of expertise,” said Gautam Bhandari, a partner at I Squared Capital. “We intend to grow Viridian with the leadership team to achieve its full potential. The acquisition of Viridian is consistent with our strategy of investing in robust growth economies, such as Ireland, and within those economies selecting companies with stable cash flows and a potential to grow the business organically and through bolt-on acquisitions.”
“Over the last decade, Viridian has cemented its position as Ireland’s leading independent integrated energy business,” said Viridian’s CEO Ian Thom. “We are excited by the opportunity to work with I Squared Capital, which brings a proven track record of successfully operating and helping to expand businesses such as Viridian. In addition, the Group’s increased financial strength will enable us to capitalise on the many growth opportunities in our markets, which will benefit our employees and our customers.”
Credit Suisse acted as financial adviser to I Squared Capital, and Kirkland & Ellis International LLP acted as legal adviser.
Evercore acted as financial adviser to the selling shareholders alongside Houlihan Lokey, and White & Case LLP was Viridian’s and selling shareholders legal adviser.
I Squared Capital is an independent global infrastructure investment manager focused on energy, utilities, and transport in North America, Europe, and select high growth economies and recently received six prestigious awards, including Global Fund Manager of the Year, from Private Equity International. Based in New York, the firm has additional offices across North America, Europe and Asia.
Arcapita, Inc. (formerly known as Crescent Investments, Inc.) is a Delaware-incorporated holding and real estate company, headquartered in Atlanta, Georgia. The firm is wholly-owned by the Bahrain-based Arcapita Bank, formed in 1996 as the First Islamic Investment Bank. Arcapita Bank has offices in Bahrain, Atlanta, London, and Singapore. The company buys American companies for between $200 million and $1 billion, and sells them four to six years later. Arcapita originates alternative investments, which comply with Shari’ah principles, for its investors and shareholders. Arcapita’s management team has completed over 70 transactions with a total value of approximately $30 billion and possesses a footprint to invest on a global scale.