IC Power Ltd., a wholly-owned subsidiary of Kenon Holdings (NYSE: KEN; TASE: KEN) has agreed to acquire Energuate, an electricity distribution company in Guatemala, from DEORSA-DEOCSA Holdings Ltd, an investment company of emerging markets private equity firm Actis LLP.
The acquisition price is $299.5 million, and IC Power is expected to assume Energuate’s $289 million in debt. The purchase price is subject to adjustments and will be financed through cash on hand and a new $120 million loan facility.
Actis had acquired Energuate (then known as DEOCSA/DEORSA) from Gas Natural Fenosa in May 2011, in a deal considered to have been the first leveraged buy-out (LBO) in Guatemala’s history.
Kenon Holdings was founded in 2015 as a spin off from the Israel Corporation and is owned by Israeli billionaire Idan Ofer. It is headquartered at the Millenia Tower in Singapore and employs a workforce of 5,766. It is traded both on the New York Stock Exchange and the Tel Aviv Stock Exchange. The company’s holdings include 100% of – a leading owner, developer and operator of power generation facilities in the Latin American, Caribbean and Israeli power generation markets; 50% of Qoros – a Chinese automobile company; 32% of Zim Integrated Shipping Services; and 91% of Primus Green Energy Inc. – an early stage developer of alternative fuel technology.
Energuate operates approximately 33,000 km of distribution lines within Guatemala, representing approximately 94% of Guatemala’s distribution lines. In 2014, Energuate’s companies sold 2,160 GWh of energy, representing 35% of the total energy consumed in Guatemala.
The Energuate business includes two smaller companies: Comercializadora Mayorista de Electricidad, S.A., an electricity trading company that provides services to large customers, and Redes Electricas de Centroamerica, S.A., a transmission company that owns and operates 31 km of transmission lines and eight sub-stations.
The deal is expected to be completed in January 2016, subject to customary closing conditions.
Kenon Holdings Ltd. owns, develops, and operates power generation facilities primarily in Latin America, the Caribbean, and Israel markets. It also develops, manufactures, and distributes passenger vehicles in China; provides container shipping services; manufactures specialty foundry semiconductor; and develops and owns proprietary natural gas-to-liquid technology process, as well as dish technologies for solar thermal power fields. As of December 31, 2014, the company operated 85 owned and chartered vessels.
Actis LLP is a a global pan-emerging market private equity firm. It has a growing portfolio of investments exclusively across Asia, Africa and Latin America, with $7.6 billion in assets under management. Actis was formed in July 2004, as a spinout of CDC Group plc (formerly the Commonwealth Development Corporation), an organization established by the UK Government in 1948 to invest in developing economies in Africa, Asia, and the Caribbean. The Actis management team acquired majority ownership of CDC’s emerging markets investment platform. The firm is headquartered in London, and has multiple offices around the world.