KKR has agreed to buy about 61 percent of Greenvolt, the Lisbon-listed renewables company, for $769 million. It did so by signing private contracts with seven shareholders before launching a public offer for the rest. By the time other investors were asked to sell, control had already been agreed.
Key takeaways
- KKR, through its vehicle Gamma Lux Holdco, agreed on 21 December 2023 to acquire a 60.86 percent stake in Greenvolt Energias Renovaveis, a Portuguese renewable energy company, for $769 million, covering 84,699,101 shares at $9.09 per share.
- KKR's $9.09 per share offer for Greenvolt was more than 11 percent above the previous closing price and a 32.1 percent premium to the weighted average share price over the preceding six months.
- KKR signed share purchase contracts for its Greenvolt stake with seven shareholding companies: Actium Capital, Caderno Azul, Livreflux, Promendo Investimentos, V-Ridium Holding Limited, KWE Partners Ltd and 1 Thing Investments.
- Greenvolt owns six biomass power plants totalling about 142 MW, five in Portugal and one in the UK, and has a 7.7 GW pipeline of wind, solar and storage assets, of which 2.9 GW were ready to build or expected to be operational in 2023 as of November 2023.
- Greenvolt reported EBITDA of $108.71 million and revenue of $364.67 million for the twelve months to September 2023, with net financial debt of $567.42 million and cash of $512 million.
How does buying from seven shareholders change a takeover?
A conventional public takeover asks every shareholder to accept the same offer, and the bidder only gains control if enough of them do. KKR reversed the order. It first agreed private share purchase contracts with seven holding companies that together own 60.86 percent of Greenvolt. Only then did it bid for the rest.
This makes the outcome of the public offer far less important to KKR. Control is secured through the private contracts, subject to regulatory approvals. The public offer decides how much of the remaining 39 percent KKR ends up owning, and whether Greenvolt stays listed.
That last point is explicit in the terms. KKR has said that if its offer reaches 90 percent or more of Greenvolt's capital, it will delist the company from the stock exchange. Minority holders who do not sell face the prospect of holding unlisted shares in a KKR-controlled company.
How generous is the 32 percent premium?
The premium looks different depending on which reference point is used. Against the previous day's close, KKR is paying a little more than 11 percent extra. Against the six month weighted average, it is paying 32.1 percent more. The gap tells you the share price had already risen in the run up to the announcement.
For the seven selling shareholders, the six month figure is the relevant one, since it reflects where they could have sold in the market over a longer period. For a minority shareholder deciding whether to accept the public offer, the previous close matters more, because it is the price available without the deal.
Greenvolt is also broader than its home market. Its biomass, wind, solar, battery and distributed generation businesses span Europe and the US. It is a relatively young listed company too. It joined the Lisbon stock exchange in 2021 after being spun off from Altri, the Portuguese pulp producer. A short trading history leaves less of a track record for minority holders to judge the offer against.
What is KKR actually paying for?
Grossing the consideration up to 100 percent shows what KKR's price implies for the whole company. $769 million for 60.86 percent values all of Greenvolt's equity at about $1.26 billion. Adding net financial debt of $567.42 million gives an enterprise value of about $1.83 billion.
Against twelve month EBITDA of $108.71 million, that is about 16.8 times earnings. Greenvolt's operating base is small, with its biomass plants producing more than 1,000 GWh a year. A multiple at that level suggests KKR is also paying for growth: the 7.7 GW development pipeline and the distributed generation unit, which held 251.3 MW of allocated projects and 44.6 MW installed as of May 2023.
On the revenue side, Enerdatics understands that Greenvolt signs long-term PPAs with utilities and corporates. Leap's per MW figure for this deal, about $0.1 million per MW across 8,093.4 MW, is not a useful measure, because almost all of that capacity is pipeline that has not been built.
Enerdatics' data shows that European corporate renewables deals announced in 2023 and 2024 rarely disclose earnings multiples. Of 207 corporate transactions in the period, 15 carry a reported EV to EBITDA multiple, with a median of 14.8 times and an interquartile range of 10.9 to 17.8 times. A $5.15 billion German solar platform deal in March 2024 priced at 14.7 times, and Masdar's June 2024 agreement for 70 percent of TERNA ENERGY in Greece at 16.2 times. On Enerdatics' arithmetic, KKR's implied 16.8 times for Greenvolt sits in the upper half of that range. On revenue the picture reverses. The implied $1.83 billion enterprise value is about 5.0 times Greenvolt's $364.67 million of twelve month revenue, below the 6.83 times median across the 20 European corporate deals in the period that report a revenue multiple.
What does the deal signal for European renewables platforms?
The first signal is that private equity is paying platform multiples for development capability, not just for operating assets. Greenvolt's earnings today come mainly from biomass. The price reflects the expectation that its wind, solar, storage and distributed generation pipeline converts into cash flow.
The second is that listed mid cap renewables companies remain vulnerable to take private bids. Greenvolt's shareholder register made the private contract route possible: seven holders were enough to deliver control. KKR was active elsewhere in energy infrastructure that month too. Its take private of Smart Metering Systems in the UK was announced in the same month, at a higher multiple.
The third is balance sheet capacity. At the end of September 2023 Greenvolt held $512 million of cash against $567.42 million of net financial debt. A controlling owner with deep funds can push the pipeline faster than public market investors were prepared to finance it.
Watch whether the public offer clears the 90 percent delisting threshold. That will show whether Greenvolt's remaining shareholders agreed with the seven that sold.
Frequently asked questions
Who advised KKR on the Greenvolt acquisition? Mediobanca acted as exclusive financial advisor to KKR.
When is the KKR acquisition of Greenvolt expected to close? The transaction was expected to close by 31 May 2024, subject to regulatory approvals and customary closing conditions.
Will Greenvolt be delisted? KKR said it would proceed to delist Greenvolt from the stock exchange if its offer reaches 90 percent or more of the company's capital.
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