Private equity firm KKR clinched a landmark green energy deal yesterday after snapping up a stake in a Spanish-based windpower business.
KKR, led by veteran buyout pioneers Henry Kravis and George Roberts, will pay €417m (£334m) to buy one-third of Acciona Energy International (AEI), which creates electricity from wind power. The agreement marks one of the biggest green energy transactions ever valuing AEI at about €1.3bn on an equity basis, or €2.6bn including its debt pile.
KKR and Acciona also said they would pursue an initial public offering of the assets through a fashionable new corporate structure called a YieldCo.
YieldCos, which mirror real estate investment trusts in the property sector, allow power producers to pay steady dividends to investors but have certain tax benefits.
AEI is a spin out from Spanish green energy business Acciona Energy. Acciona will own the two-thirds of the business KKR does not own under the terms of the new deal.
“This investment adds to our track record of building successful partnerships with corporates and families,” said Kravis, the co-chief executive and co-chairman.
KKR’s move into green energy, which has been funded out of the firm’s infrastructure fund, has gathered pace over the last three years after its first renewables deal in 2011.
The firm’s move into the green energy sector comes after it got burnt by investments in oil companies such as TXU, which entered the biggest bankruptcy in history. The growth of shale was blamed for the oil producer’s downfall.