KKR’s Goes Down Under with $1.1B Zenith Energy Deal
Plus: We outline portco M&A and exits from last week.
Hitting its Peak.
KKR agreed to buy Zenith Energy, an Australian independent power producer specializing in energy solutions for Australian mining sites, for A$1.7 billion ($1.1 billion) from a consortium of investors including Pacific Equity Partners, OPTrust, and Foresight Group.
The deal, expected to close by the end of the year, follows Zenith’s A$1.9 billion refinancing deal which has increased the size of its existing bank debt facilities, providing the company with more than A$1 billion of growth capital from several lenders.
The only other example of KKR investing in Australian energy generation is a deal done alongside Ontario Teachers’ and PSP Investments in 2021 to take Spark Infrastructure private for A$5.2 billion.
Courting Spark.
Since the take-private in 2021, KKR (alongside OTPP and PSP) has grown Spark Infrastructure by focusing on expansion into renewable energy generation assets. This is likely to be replicated at Zenith, given that 40 percent of the company’s current installed capacity comes from renewable energy and the firm has reiterated its dedication to the energy transition.
Things are different now, though, for renewable energy assets in Australia when compared with the 2021 landscape — and it is likely to be in KKR’s favor. There is new policy certainty from the labor government, with Prime Minister Albanese championing the Capacity Investment Scheme which provides a long-term revenue safety net that decreases financial risk for investors in renewable energy.
There are headwinds, however. Zenith represents KKR’s first foray into the outright ownership of a utility-scale energy generation platform. Former investments in Avantus, Virescent Infrastructure, First Gen, Serentica Renewables, and — of course — Spark Infrastructure all included co-investors.
KKR did not respond to request for comment.
PE portcos also saw some full and partial exits last week, as well as some exits-to-be:
Brookfield Infrastructure Partners agreed to buy Hotwire Communications, an all-fiber ISP operating in nine U.S. states, from Blackstone for approximately $7 billion, including debt. Blackstone acquired Hotwire in 2021 for about $1 billion.
Clearview Capital exited Results Partners, a Pacific Northwest-based vineyard management and development services provider, to Atlas Vineyard Management. Clearview acquired Results Partners in 2016 through its Wilson/OVS platform and nearly doubled its size before the sale, though financial terms of the deal were not disclosed.
3i sold MPM Products, a global pet food business, to Partners Group for an undisclosed sum. 3i claims the sale has generated gross proceeds of £400 million ($543 million).
EQT-backed Enity Holding, a specialist Nordic mortgage provider, began trading on Nasdaq Stockholm, constituting a partial exit for the private equity firm. The offering, which was priced at SEK 57 ($5.96) per share, was oversubscribed more than ten times, closing at SEK 71.88, implying a market capitalization of SEK 3.6 billion. EQT sold shares totaling approximately SEK 1.7 billion, resulting in aggregate gross proceeds of SEK 1.2 billion.
Audax sold Thermogenics, a North American industrial boiler service provider Audax has held since 2022, to Morgan Stanley Capital Partners for an undisclosed sum.
The Ontario Teachers’ Pension Plan sold its stakes in Bristol airport (55 percent), Birmingham airport (26.5 percent), and London City airport (25 percent) to Macquarie Infrastructure, exiting assets it has held since 2001, 2007, and 2016, respectively. Financial details weren’t disclosed, but OTPP previously valued its European airport portfolio at over £10 billion.
Sleeping Bear Capital sold Edge Autonomy, a provider of autonomous aircraft technology the firm has held a minority position in since 2022, to Redwire Corporation, a publicly traded aerospace and defense company, for $1.14 billion.
Unilever agreed to acquire Dr. Squatch, a natural men's personal care brand that has been backed by Summit Partners since 2021, marking a full exit; terms were not disclosed, though Summit had previously valued the brand at around $2 billion.
Meanwhile, portco M&A was in full swing:
Apax Partners-backed Zellis Group, an HR/payroll provider based in Ireland and the UK which Apax bought in 2024, bought Hastee, a London-based earned-wage-access and financial wellbeing platform. Deal terms were not disclosed.
OMERS Private Equity-backed Integris, a US-managed IT services firm, acquired TechMD, a cybersecurity and managed services provider backed by ClearLight Partners, for an undisclosed amount.
Hg-backed CUBE, a UK-based RegTech specialist, bought Acin, a London-based AI operational risk management provider founded in 2018, for an unknown sum.
H.I.G. Capital portfolio company GetixHealth, a Houston-based healthcare revenue-cycle-management provider the firm has owned since 2023, acquired Americollect, a patient engagement solutions firm. Financial terms were not disclosed.
Brookfield Asset Management- and Canada Growth Fund-backed Entropy Inc. agreed to acquire 50 percent stakes in the Belle Plaine & Rolling Hills carbon-storage hubs for C$20 million ($14.6 million) plus C$15 million in contingents. Brookfield/CGF funded Entropy in 2022 and this is its first asset purchase.
See you next week!