ORARY power provider APR Energy yesterday said it has agreed to buy General Electric’s power rental business for $314m (£194m), in a deal which its chief executive called “transformational” for the company.
John Campion told City A.M. that the acquisition of GE Power & Water in Houston, which rents mobile gas turbines to provide temporary power, would provide “financial, technological and geographical diversification” for APR. GE Power & Water has contracts in Bangladesh, Iraq, the US Virgin Islands, Canada, Australia and Dubai.
General Electric will become a key strategic investor in APR as a result of the deal.
The US conglomerate will receive around 15.5m APR shares valued at $250m and $64m in cash.
Andrew Martinez, chief financial officer, said that the deal would start to boost the company’s earnings next year, after one-off integration costs had been absorbed.
The firm sees opportunities in both developing and developed markets, which could include the UK as fears of energy shortages increase.
“Authorities will want to use companies like us as an insurance policy,” said Campion.
In a separate statement, APR posted third-quarter revenues of $84m, in line with expectations.
APR’s shares surged 20.4 per cent higher to close at £11.50.
ADVISERS APR ENERGY
JP Morgan and Numis are advising APR Energy on its £194m acquisition of General Electric’s power rental business.
The Numis team is being led by Alex Ham and Stuart Skinner. Ham is co-head of corporate broking and is on the shortlist for Rising Star of the Year at this year’s City A.M. Awards. Ham has worked at Numis since 2005 and advised on the flotations of Horizon and Betfair last year. He also helped secure the 10 per cent Ocado cornerstone investor in the online grocer’s fundraising prior to its public offering. He advises online fashion retailer Asos, including on yesterday’s accelerated bookbuild. Skinner is a director for corporate finance and previously worked at Travers Smith. He is also working on property solicitor In-Deed’s acquisition of Epic, an e-learning business and has advised on numerous transactions for insurance group Randall & Quilter Investment Holdings.
The JP Morgan team is being led by Andrew Truscott and Richard Walsh. Truscott advised on G4S’ recent share placing and recently advised construction group Kier on its takeover bid for May Gurney.
Capital MSL is advising on public relations.