London-based asset management giant Schroders plc announced that it agreed to acquire a 75% shareholding in Greencoat Capital Holdings Limited for an initial consideration of £358 million in cash.
Greencoat is one of Europe’s largest renewable energy infrastructure managers, with £6.7 billion of assets under management (AUM).
Greencoat will become part of Schroders Capital, Schroders’ private markets division and be known as Schroders Greencoat.
“Greencoat pioneered large-scale renewable energy infrastructure investing in listed and private formats, delivering compound AUM growth of over 48% per annum over the last four years to 31 March 2021,” said Schroders …
“Over the past 12 months Greencoat achieved net new commitments for private funds and equity raises for listed funds of £1.6 billion (1 December 2020 to 30 November 2021) …
“Schroders and Greencoat have an ambition to be a global leader in this fast-growing and important investment sector …
“As part of Schroders, Greencoat’s growth and its offering to clients will be significantly enhanced, benefitting from Schroders’ distribution reach, sustainability capabilities, management experience and brand.”
Established in 2009, Greencoat is a specialist investment manager focussing on renewable energy infrastructure investments including wind, solar, bioenergy and heat.
Greencoat operates nearly 200 power generation assets across the UK, Europe and the US, with an aggregate net generation capacity of over 3 gigawatts.
“The deal includes a potential earn out, payable three years after completion, which is subject to stretch revenue targets, the continued employment of the senior management team in the Greencoat business and is capped at £120 million …” said Schroders.
“A series of options, exercisable by Schroders or the Greencoat management shareholders, are in place for Schroders to acquire the remaining 25% shareholding over time at a price based on a fair market valuation at the time of the option exercise.
“The structure of the option arrangements is designed to ensure maximum stability and alignment between the four founders and Schroders.”
Schroders CEO Peter Harrison said: “Greencoat is a market-leading, high growth business, with an outstanding management team, which provides access to a large and fast-growing market in high demand among our clients.
“Its culture is an excellent fit with ours and Greencoat’s focus aligns very closely to our strategy, continuing our approach of adding capabilities in the most attractive growth segments we can provide to our clients.
“We have demonstrated our ability to integrate acquisitions successfully, to generate growth and create significant value for our shareholders.
“We are confident that we will be able to leverage the strengths of both firms while preserving Greencoat’s differentiated position in the market.”
Richard Nourse, who founded Greencoat in 2009, said: “We are all delighted to have found a partner in Schroders who sees the potential of our business and believes deeply in our mission to build a global leader in renewables investing.
“We are extremely proud of what the brilliant team at Greencoat has together achieved, creating a market-leading renewables asset management firm in the UK and Ireland, a strong platform in Europe and an important expansion into the US.
“Combining this team with Schroders’ global distribution network and expertise will enable clients to capitalise on the unequalled opportunity that our sector represents — a trillion dollar investable universe — and the chance to meaningfully support the global transition to net zero.”