US private equity firm KKR has agreed to buy British power generation company ContourGlobal in an all-cash deal valued at £1.75 billion ($2.18 billion).
The private equity firm negotiated the deal through its new company, Cretaceous Bidco.
Under the terms of the deal, KKR will pay £2.63 in cash for each share, representing a 36% premium to the share’s closing price on May 16.
ContourGlobal is a wholesale power generation company with approximately 6.3 GW of capacity in operation in 20 countries.
The London-listed company was founded by American entrepreneur Joseph Brandt and Reservoir Capital in 2005.
It currently operates a portfolio of 138 thermal and renewable power plants in Europe, North America, Latin America and Africa.
ContourGlobal President and CEO, Joseph C Brandt, said, “What started in one small office with three people in New York has grown 17 years later into a global power generation company. growing company operating 138 power plants in 20 countries.
“Together, we’ve built a more than $6 billion business, and I’m very proud that we’ve experienced extraordinary growth and delivered on the commitments we made to investors when we listed the company in November 2017.”
KKR said ContourGlobal’s existing business provides a “compelling platform for significant value-added future organic and inorganic growth,” driven by the changing nature of the energy industry due to decarbonization goals.
Vincent Policard, KKR Partner and Co-Head of European Infrastructure, said: “ContourGlobal is a highly diversified global energy platform operating in a transforming industry.
“We believe that private ownership would allow ContourGlobal to invest in the business on a larger scale and with more flexibility, including accelerating energy transition investments to achieve reported net zero commitments.”
In December last year, KKR and its consortium partners acquired all issued securities of Australian company Spark Infrastructure for a cash consideration of A$5.2 billion ($3.7 billion).