This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

KKR to Take Piece of Acciona Renewables Arm

NEW YORK (The Deal) -- New York buyout shop KKR & Co.  (KKR - Get Report) said Tuesday it had snapped up a third of the international renewable energy arm of Spanish infrastructure group Acciona in a deal valuing the unit at an enterprise value of 2.6 billion euros ($3.54 billion).

KKR will pay 417 million euros for its equity stake and will invest further to fund the growth of Acciona Energia International ahead of planned an initial public offering. The investment values AEI's equity at 1.3 billion euros, while the unit has a further 1.3 billion euros in debt, the companies said.

AEI owns wind farms and solar energy assets that can produce as much as 2.3 gigawatts of energy across the 14 countries in which it operates. AEI is expected to return 120 million euros per annum to its owners, meaning KKR's investment equates to a multiple of about 21 times earnings based on the enterprise value.

"The intention of both partners is to promote an international IPO through a YieldCo vehicle that will hold all or part of the assets of AEI," the companies said.

The price of European wind assets has declined in recent years as governments have scaled back subsidies that underpinned stable returns and made renewable energy a favorite investment of pension and infrastructure funds.

Acciona launched a sale of the minority stake in its international unit to help raise as much as 1 billion euros to reshape its business after Spain cut subsidies for wind energy output in July last year. The reduction in subsidies cut Ebitda at Acciona's Spanish wind operations by about 360 million euros,or 40%, "turning it into a loss-making activity," according to Acciona's 2013 annual report presentation. The Spanish wind assets are not part of the AEI operations.

KKR's investment was made through its Global Infrastructure Fund. The acquisition is the fund's 12th investment and comes three years after its made its first foray into European wind energy in June 2011, when it launched a 236 million euro joint venture with Italy's Sorgenia SpA to build wind farms in France.

"This investment adds to our track record of building successful partnerships with corporates and families," said KKR co-Chairman and co-CEO Henry Kravis. "I am really optimistic about the opportunity to partner with such a prominent renewable energy company and to help further develop what is already one of the largest operating renewable portfolios in the world."

Acciona Chairman Jose Manuel Entrecanales and his family own about 54% of Acciona through subsidiaries of their holding company Grupo Entrecanales.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
KKR $22.82 0.00%
AAPL $125.80 0.00%
FB $77.56 0.00%
GOOG $530.80 0.00%
TSLA $232.95 0.00%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs