Terra Firma Takes Infinis Energy Private Two Years After Listing

  • Infinis valued at 555 million pounds, 28% less than at IPO
  • Guy Hands says Terra Firma wants to monetize Infinis stake

Guy Hands’s buyout firm Terra Firma Capital Partners is to repurchase the shares it doesn’t own in Infinis Energy Plc two years after listing the company in a deal that values the renewable energy generator at about 555 million pounds ($859 million).

Monterey Capital II S.à r.l., a unit of Terra Firma, already owns 68.5 percent of Infinis and will pay 185 pence in cash for each share outstanding, according to a statement on Thursday. That’s a 40 percent premium to yesterday’s close.

Shares of Infinis have tumbled this year as Prime Minister David Cameron’s government ratcheted back support for renewable energy, saying it wanted to halt subsidy for all new onshore wind developments to protect the countryside. Infinis is one of the U.K.’s leading owners of wind farms independent of the utilities. It was valued at 780 million pounds when Terra Firma listed it in November 2013.

“We have considered gradual sell-downs of our interest in the company since its IPO and more recently we have also explored other strategic options, but the change in the regulatory environment for Infinis has prompted us to rethink our strategy," Hands, chairman and chief investment officer of Terra Firma, said in the statement.

Monterey Capital has maintained its stake in Infinis since the IPO, a contrast to other funds that often pare back their holding further after a listing.

A deal would allow Terra Firma to "pursue alternative options" to monetize its investment in Infinis, Hands said. He said the deal was consistent with Terra Firma’s strategy of monetizing its investment in Infinis,” which it has owned for 10 years.

A drop in power prices along with changes to regulation of the industry have hurt “both the cash generation and growth prospects” of Infinis, said Ian Marchant, chairman of the company. Infinis’ independent directors looked at offers for the whole business as well as selling assets separately and decided Terra Firma’s offer is the best one, he said.

Goldman Sachs Group Inc. acted as sole adviser to Terra Firma. Barclays Plc and RBC Capital Markets were joint advisers and corporate brokers to Infinis.

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