Keeping alive a legacy of meaningful investments, Kohlberg Kravis Roberts & Co. (KKR - Free Report) recently entered into a partnership with Acciona – a Spanish infrastructure, energy, water and sustainable services provider. As part of the transaction, Kohlberg Kravis will acquire a one-third stake in Acciona Energía International (:AEI) – a part of Acciona’s energy arm – for €417million ($567 million). The deal is expected to close by 2014 end.
AEI’s portfolio comprises renewable energy assets of 2.3 gigawatts across the U.S., Mexico, Australia, Italy, Portugal and South Africa. The energy division of Acciona also known as Acciona Energía will continue to own the remaining stake in AEI.
Kohlberg Kravis, along with AEI, intends to build the world’s largest renewable energy portfolio. Additionally, the partners are also planning an international initial public offering (IPO) via a YieldCo vehicle. The YieldCo vehicle will hold part of or the entire asset of AEI. Per the deal, Kohlberg Kravis might have to pay an additional €50 million based on the performance of the public offering.
Kohlberg Kravis is financing the deal from its global infrastructure fund. The fresh infusion of capital will bring AEI’s enterprise value to €2.6 billion ($3.5 billion), divided equally between equity and net debt. Upon completion, the deal will mark one of the highest-valued transactions in the energy sector.
The renewable energy sector in Spain has been facing a downturn as the regulatory authority recently removed subsidy from the sector. Therefore, the stake divestiture will help Acciona sustain its international business. Moreover, it will aid Kohlberg Kravis to expand further into the global energy business platform.
Kohlberg Kravis has an impressive history highlighted by strategic investments. Its recent mergers and acquisitions reflect investments in diverse sectors ranging from energy to healthcare. Going forward, the synergies from the acquired units will continue to support its top-line growth.
Kohlberg Kravis currently carries a Zacks Rank #2 (Buy). Other investment mangers worth considering include Woori Finance Holdings Co., Ltd. (WF - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and Artisan Partners Asset Management Inc. (APAM - Free Report) . While Woori Finance Holdings sports a Zacks Rank #1 (Strong Buy), Ameriprise and Artisan Partners Asset Management hold the same Zacks Rank as Kohlberg Kravis.