A consortium of investment funds is looking forward to a big payday after agreeing to sell remote power producer Zenith Energy to private equity and investment giant Kohlberg Kravis Roberts & Co (KKR) in a deal reported to be worth more than A$2 billion.
KKR said it had signed agreements to buy Zenith from a consortium including Australian private equity group Pacific Equity Partners (PEP), Canada’s OPSEU Pension Trust and London-listed Foresight Group (LON: FSG) with Zenith’s founder and management retaining a minority stake.
“KKR’s investment will position Zenith well for continued long-term growth on the back of favourable sector fundamentals and macro tailwinds", KKR said in a media release.
The value of the deal or the size of the minority stake retained by the founder and management was not disclosed.
However The Australian newspaper reported in an article that the acquisition price valued Zenith at more than A$2 billion (US$1.3 billion).
KKR’s Managing Director and Head of Australia & New Zealand Infrastructure Andrew Jennings said Zenith’s position at the forefront of the energy transition and its long-term relationships with strategic, high-quality counterparties, made it an ideal investment for KKR’s Asia Pacific infrastructure platform.
“We look forward to supporting Zenith and its management team over the next stage of growth and helping them capitalise on the significant opportunity for off-grid renewable power,” Jennings said in a media release.
Zenith CEO and Managing Director Hamish Moffat said the company was uniquely positioned for significant and immediate opportunities in mining decarbonisation, which it could deliver via large-scale, highly penetrational hybrid power projects.
“The investment by KKR will accelerate our growth and ability to service large scale projects with a broad capital base,” Moffatt said.
The consortium purchased the ASX-listed company in August 2020 for an enterprise value of more than $250 million, including equity and debt, which means it has reaped a return of about eight times its original investment.
Specialising in hybrid power solutions for remote, off-grid resource sector clients and urban microgrids for commercial, industrial and residential precincts, Zenith has more than 710 megawatts (MW) of contracted capacity across 15 sites.
