Infinis struggling in political environment
Marchant’s green energy firm taken private amid slowing growth
A renewables company chaired by former SSE chief executive Ian Marchant has been taken private amid a struggle with regulatory burdens and slowing growth prospects.
Infinis, which floated two years ago, has recommended a cash acquisition of at 185p per share from Guy Hands’ Terra Firma company which already owns 68.5% of the firm through its Monterey arm.
The Acquisition values Infinis’ entire issued and to be issued ordinary share capital at £555 million.
Infinis is a renewable power generator operating 137 power plants with an installed capacity of 585 MW generating renewable power from landfill gas and onshore wind.
It also has four onshore wind projects under construction which are expected to deliver 135 MW of incremental onshore wind capacity by 31 March 2017. The Infinis Group is the largest power generator from landfill gas in the UK and one of the UK’s leading onshore wind power generators.
Mr Hands, chairman and chief investment officer at Terra Firma, said: “The transaction announced today is part of Terra Firma’s strategy of monetising its investment in Infinis, a business that we have owned and invested in over more than a decade.
“We have considered gradual sell-downs of our interest in the company since its IPO in November 2013 and more recently we have also explored other strategic options, but the change in the regulatory environment for Infinis has prompted us to rethink our strategy.
“We believe that this transaction offers Infinis’ shareholders an attractive cash consideration for their shares in Infinis and allows Terra Firma to pursue alternative options to monetise its investment in Infinis once it is a private company.”
Mr Marchant said: “Since the IPO of Infinis two years ago, our management and employees have delivered what was promised in terms of both operational performance and the development of the business, with 135 MW of new wind capacity in construction.
“However, the challenging regulatory and political environment and the reduction in power prices in the last two years have adversely affected both the cash generation and the growth prospects of the business.
“Accordingly, the Infinis independent directors have been actively exploring ways to maximise value and have looked at offers for the whole business as well as selling the assets separately. Following this work, the Infinis independent directors firmly believe that the offer from Monterey represents the best combination of risk and return for shareholders.”