Green Giant Hunt: KKR Targets Encavis In $3B Takeover Play

KKR & Co KKR plans to launch a voluntary public takeover offer to all shareholders of Encavis AG ENCVF for an equity value of around €2.8 billion.

Elbe Bidco, an investment vehicle owned by KKR, plans to offer a cash consideration of €17.50 per Encavis share.

This represents an attractive premium of 54% to the undisturbed closing share price and 33% to the undisturbed three-month volume-weighted average share price as of March 5, 2024.

Abacon Capital and other existing shareholders have signed binding agreements to sell around 31%, partly roll over Encavis shares to Bidco, and fully support the offer.

Also, family company Viessmann will invest as a co-investor in the consortium led by KKR. The offer, subject to various Offer conditions, is projected to close in the fourth of 2024.

Vincent Policard, KKR’s Partner and Co-Head of European Infrastructure stated, “Unlocking the full potential of renewable energy requires expertise as well as substantial long-term capital. We are pleased that KKR’s strategic investment will provide Erik with the necessary long-term financial resources at a pivotal time for the Company and position it to seize emerging opportunities and solidify its strength in the clean energy landscape Furthermore, it also contributes to fostering a more energy-independent Europe.” 

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Bidco aims to boost growth in all segments of the Encavis and targets to reach 7 GW of installed capacity by year-end 2027, which is above the current target of 5.8 GW, with continued growth thereafter.

The deal is also subject to a minimum acceptance threshold of 54.285% at the expiry of the acceptance period, which ensures that Bidco will retain at least 50% of the shares at closing in case holders of the hybrid convertible bond decide to exercise their conversion rights during the transaction. 

As of FY23-end, KKR’s cash and investments stood at $29 billion.

Price Action: KKR shares are trading lower by 0.83% at $97.14 on the last check Thursday.

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