I Squared Capital buys Viridian for reported €1bn

Private equity firm I Squared Capital (ISQ) has acquired Belfast-based energy company Viridian for a reported €1 billion.

Viridian is a leading independent energy company in the all-Ireland market with two main brands, Energia in the Republic and Power NI north of the border.

In addition, it operates two power plants at Huntstown in north Dublin and has invested in wind farms in the Republic.

Viridian has an estimated 20 per cent share of domestic electricity sales volumes and a 27 per cent share of business volumes on an all-island basis.

Overall, its portfolio consists of 747 megawatts of gas-fired combined-cycle generating technology capacity and 225 megawatts of onshore wind assets in operation and construction. It also has 793 megawatts of operating wind-farms under long-term contracts which is expected to increase to 1,000 megawatts in just over a year as other wind-farms, currently under construction and in-development, become operational.

ISQ Global Infrastructure Fund is to acquire 100 per cent of Viridian in an all-cash transaction, which is expected to complete during the second quarter. I Squared Capital has also undertaken to provide additional significant equity cushion by paying down approximately £145 million in existing junior debt with new equity.

The Irish Times reported earlier this month that the State-owned Ireland Strategic Investment Fund stepped back from its involvement in a consortium bidding for the energy provider as a result of a failure by the Dáil to elect a new Government. The owners of Bord Gáis Energy and Airtricity were also believed to have submitted bids for Viridian, which was put up for sale by Arcapita Bank in December.

According to Viridian’s latest accounts which were filed in January, turnover reached €90.3 million for the 12 months to March 31st 2015. This is down from the previous year, when it recorded revenues of €132.1 million.

I Squared, which owns renewable energy assets in the US and India, is an infrastructure fund founded in 2013 by a number of former Morgan Stanley senior executives. Headquartered in New York, it has $3.8 billion of assets under management.

“Viridian has an attractive mix of diversified businesses with significant overlap with our areas of expertise. We intend to grow Viridian with the leadership team to achieve its full potential,” said Gautam Bhandari, a partner at I Squared Capital.

“The acquisition of Viridian is consistent with our strategy of investing in robust growth economies, such as Ireland, and within those economies selecting companies with stable cash flows and a potential to grow the business organically and through bolt-on acquisitions,” he added.

Viridian moved back into the black last year, posting an after tax profit of €7.5 million, compared to a loss of €21.9 million the previous year.

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