US-based private equity firm KKR has agreed to purchase British power generation company ContourGlobal in an all-cash deal valued at £1.75bn ($2.18bn).
The private equity firm brokered the deal through its newly formed company, Cretaceous Bidco.
Under the terms of the agreement, KKR will pay £2.63 in cash for each share, which represents a premium of 36% to the closing share price on 16 May.
ContourGlobal is a wholesale power generation company with approximately 6.3GW of capacity in operation across 20 countries.
The London-listed company was founded by the US entrepreneur Joseph Brandt and Reservoir Capital in 2005.
It currently operates a portfolio of 138 thermal and renewable power plants across Europe, North America, Latin America and Africa.
ContourGlobal president and CEO Joseph C Brandt said: “What started in a single small office with three people in New York has grown 17 years later into a global, high-growth power generation company operating 138 power plants in 20 countries.
“Together we have built an over $6bn enterprise, and I am very proud that we have grown extraordinarily well and honoured the commitments we made to investors when we listed the company in November 2017.”
KKR said that ContourGlobal’s existing business provides a ‘compelling platform for significant future organic and inorganic value-accretive growth’, driven by the changing nature of the energy industry as a result of decarbonisation targets.
KKR partner and co-head of European Infrastructure Vincent Policard said: “ContourGlobal is a highly diversified global energy platform operating in an industry undergoing a transformational shift.
“We believe that private ownership would enable ContourGlobal to invest in the business at greater scale and with more flexibility, including accelerating investments in energy transition to reach the stated net zero commitments.”
In December last year, KKR and its consortium partners acquired all the issued securities of Australian company Spark Infrastructure for a A$5.2bn ($3.7bn) cash consideration.