KKR buying RE firm ContourGlobal for £1.75 billion

Leading investment firm Kohlberg Kravis Roberts & Co (KKR) has announced that it is buying ContourGlobal, a renewable energy company. The deal is for £1.75 billion. According to KKR, the company is offering shareholders of ContourGlobal 263.6p for every share. This offer price represents a 36 per cent premium to the last closing price of ContourGlobal.

According to reports, the acquisition has valued the complete issued and also to be issued ordinary share capital of ContourGlobal at £1.75 billion. This is on a fully diluted basis. The enterprise value is also kept at $6.14bn.

The entire all-cash acquisition is being implemented by an agreement which is approved by court. But this is yet to be recommended by the ContourGlobal Board unanimously. As per the reports, the deal will completed soon because, as per reports, most of the shareholders of ContourGlobal are backing the deal. Craig Huff, Chairman of ContourGlobal, said, “The Board of ContourGlobal believes that the offer provides an opportunity for all shareholders to crystallise their investment in ContourGlobal at an attractive price.” At present KKR has 72.8 per cent shareholders’ support for the said acquisition and legally it requires 75 per cent.

KKR believes that the existing businesses of ContourGlobal provides a compelling platform for significant future organic and inorganic value-accretive growth as decarbonisation ambitions of countries is changing the nature of the energy industry.

“KKR believes it can support ContourGlobal…which aims at meaningful 40 per cent reduction of CO2 emissions intensity by 2030, and to be net zero carbon by 2050,” said the company in its official statement.

ContourGlobal is a global player that owns and operates contracted wholesale power generation businesses. It has business capacity of about 6.3 GW in 20 countries. It’s a London-listed company maintaining a portfolio of 138 thermal and renewable power projects across Europe, North America, Latin America and Africa.

Last month, KKR had agreed with Albioma to participate in a friendly public tender offer meant to accelerate Ablioma’s energy transition in overseas territories of France.

Since 2020, there has been a significant shift of private equity capital towards investments into renewable energy assets, as these firms see both predictable returns and the possibilities of strong growth for the coming decades in the sector.