Energy Capital Partners to Acquire Atlantica Sustainable Infrastructure for $2.6 Billion
Atlantica Sustainable Infrastructure Solar Assets. Photo Credit: Energy Capital Partners
Key Points
- Energy Capital Partners and institutional co-investors agreed to acquire Atlantica Sustainable Infrastructure for $22 per share in all-cash transaction.
- The deal values Atlantica at approximately $2.6 billion in equity value and represents an 18.9% premium to the April 22 closing price.
- Algonquin Power & Utilities, holding 42.2% of Atlantica shares, entered support agreement to vote in favor of the scheme of arrangement.
- Transaction subject to shareholder approval, court sanction, and regulatory clearances including Hart-Scott-Rodino, CFIUS, and FERC approvals.
- Deal expected to close in Q4 2024 or early Q1 2025, after which Atlantica will become privately held and delist from public markets.
Deal Overview
Atlantica Sustainable Infrastructure plc (NASDAQ: AY) announced it has entered into a definitive agreement pursuant to which a private limited company controlled by Energy Capital Partners will acquire 100% of Atlantica’s shares for $22 per share in cash1. The acquiring entity includes a large group of institutional co-investors alongside ECP.
The purchase price represents an 18.9% premium to Atlantica’s closing share price on April 22, 2024, the last trading day prior to market rumors regarding a potential acquisition. The price also represents a 21.8% premium to the 30-day volume weighted average trading price as of April 22, 2024.
“This transaction is the culmination of a thorough and comprehensive strategic review process,” said Michael D. Woollcombe, Chair of Atlantica’s Board of Directors. “After carefully analyzing all reasonably available alternatives with the assistance of external advisors over a prolonged period, our board unanimously concluded that this transaction represents the best value maximizing alternative available and that its completion is in the best interest of Atlantica and its shareholders.”
Transaction Terms
The all-cash transaction will be completed pursuant to a scheme of arrangement under the U.K. Companies Act 2006. The transaction structure reflects Atlantica’s incorporation in England and Wales.
| Term | Details |
|---|---|
| Transaction Value | Approximately $2,555 million equity value |
| Consideration | $22 per share in cash |
| Premium (vs. April 22 close) | 18.9% |
| Premium (vs. 30-day VWAP) | 21.8% |
| Expected Closing | Q4 2024 or early Q1 2025 |
Algonquin Power & Utilities Corp. and Liberty (AY Holdings), B.V., which collectively hold approximately 42.2% of Atlantica’s shares, have entered into a support agreement with Bidco pursuant to which Algonquin has agreed to vote its shares in favor of the scheme.
Strategic Rationale
Energy Capital Partners brings extensive expertise in sustainable infrastructure to support Atlantica’s growth strategy as a private company. ECP is a leading investor across energy transition, electrification and decarbonization infrastructure assets.
“We expect to continue executing on our growth strategy as a private company with the support of our new partners,” said Santiago Seage, CEO of Atlantica. “ECP has a long track record and expertise in the sustainable infrastructure sector and, together with its global co-investors, will enhance Atlantica’s ability to finance and deliver growth while maintaining our focus on safety, sustainability and value creation.”
“Atlantica’s employees and management team have a long and impressive track record of maximizing value across a complex set of global assets,” said Andrew Gilbert, a Partner of ECP. “ECP is excited about the opportunity to partner with the Company and to support and accelerate its growth.”
Founded in 2005, ECP has consummated more than 100 equity transactions representing nearly $60 billion of enterprise value and over 20 credit transactions since inception. In addition to ECP, the acquiring entity contains a group of more than 10 institutional co-investors who share Atlantica and ECP’s view of the Company’s attractive growth prospects.
Regulatory Approvals and Timeline
The transaction is subject to multiple conditions including approval by Atlantica’s shareholders of the scheme, sanction by the High Court of Justice of England and Wales, and regulatory approvals in different jurisdictions.
Required regulatory clearances include approval under the Hart-Scott-Rodino Act, by the Committee on Foreign Investment in the United States (CFIUS), and by the Federal Energy Regulatory Commission (FERC).
Upon completion, Atlantica will become a privately held company and its shares will no longer be listed on any public market. Atlantica expects to continue paying its current quarterly dividend of $0.445 per share through to the closing of the transaction, subject to board approval at the relevant times.
Citi acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom (UK) LLP acted as legal advisor to Atlantica. Latham & Watkins LLP acted as legal advisor to Energy Capital Partners, while J.P. Morgan Securities LLC acted as financial advisor and Weil, Gotshal & Manges LLP acted as legal advisor to Algonquin.