Energy Infrastructure Partners (EIP), a Switzerland-based investment manager specializing in the energy sector, agreed to acquire a 30% stake in Boralex’s assets and development pipeline in France, for $596 million, as part of its long term partnership.
The assets under the deal include more than 70 solar and wind projects in operation with total output exceeding 1 GW and a 1.5-GW development pipeline across France.
The Canadian power company Boralex said it plans to use some of the proceeds for acquisitions and growth in new geographies such as Spain and the Nordic countries, the company said in a statement.
The company said some would be used to reduce debt as part of the firm’s push for an investment-grade credit rating. An undisclosed amount will be reinvested into the French business, which Boralex wants to expand with its new Swiss partner
Boralex will focus its acquisition search on renewable energy projects – under development rather than existing wind and solar projects, which tend to be more expensive, the company said.
Boralex will remain the majority shareholder in the French business with 70%. It will continue to manage its portfolio of projects under development or construction.
Boralex’s French business booked earnings before interest, tax, depreciation, and amortization (EBITDA) of $150 million in 2021, and the deal gave it a pre-money equity valuation of $1.9 billion.
“We are grateful to the EIP team for the trust they’ve placed in us. We look forward to joining forces to fulfill our ambitions alongside a renowned player in our industry who knows the European renewable energy sector well and shares our corporate social responsibility values. In addition to creating significant value for our shareholders, this investment illustrates the quality of our team’s work in France and Canada and lets us showcase the leading platform we have been building for over 20 years,” said Patrick Decostre, President and CEO.
According to Mercom’s recently published Q4 2021 solar funding and M&A report, M&A activity in the solar sector soared with 126 transactions in 2021 – the highest number of deals ever recorded. Most of the transactions involved Solar Downstream companies.