Swedish firm OX2 has reached a SEK872m ($83.9m) deal to purchase Australian renewable energy developer ESCO Pacific.

The agreed consideration is on a debt-free basis, with the deal’s terms also enabling a consideration of up to A$17m, based on the fulfilment of sales and margin targets.

This acquisition is set for completion by the end of April 2023.

ESCO Pacific is owned by Shell, which holds a 49% stake, along with founder Steve Rademaker and private investors.

Rademaker will remain with the firm for two years, initially in the role of managing director and then as an advisor to management.

Meanwhile, OX2 and Shell will continue their collaboration, including via power purchase agreements (PPA) offtake prospects.

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Established in 2015, ESCO Pacific has a workforce of 21. Its portfolio consists of 1.4GW, including 1.2GW in solar and 200MW in energy storage.

Within the portfolio, 317MW is in the late stages of development, 395MW in the mid stages and 708MW in the early stages.

The company also claims to have several pre-early stage projects, expected to be added to its development portfolio in 2023.

The acquisition of ESCO is expected to bring significant potential for value creation through its sale of rights, and the sale of turnkey solutions as construction begins.

OX2 aims to scale up operations by acquiring solar and energy storage projects while expanding onshore wind and exploring offshore wind and hydrogen schemes.

The firm expects the acquisition to contribute positively to its results next year and beyond.

OX2 CEO Paul Stormoen said: “I am very happy to announce our entry into the Australian market, and to welcome an experienced local team to OX2.

“Through this transaction, we get an attractive development portfolio in a growing renewables market, while also significantly strengthening our capabilities within solar and energy storage. This gives us a solid foundation for profitable expansion in Australia.”

ESCO Pacific managing director and founder Steve Rademaker said: “We have found a great buyer for ESCO Pacific. OX2 is a strong player with an excellent track record, and they will no doubt have the ability to significantly grow the footprint in Australia.”