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KKR Acquires Majority Stake in U.S. Renewables Developer Avantus – ESG Today
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KKR Acquires Majority Stake in U.S. Renewables Developer Avantus
Mark Segal
March 21, 2024
Alternative asset and private equity investor KKR announced the acquisition of a majority stake in U.S. solar and storage developer Avantus, with a commitment to support the growth of the company, as it stands to benefit from “material secular headwinds” supporting renewables development in the U.S.
Founded in 2009, California-based Avantus develops and sells or operates large utility-scale solar and solar-plus-storage projects, with a focus on the southwestern U.S. and California power markets. To date, the company has developed and sold 6.5 GWp of solar and 6.3 GWh of storage projects, and it owns a project pipeline of 30 GWp of solar and 94 GWh of battery storage.
The deal marks the first U.S. investment from KKR’s Global Climate Strategy, launched by the firm in August 2023, and dedicated to investing in solutions at scale to support the transition to a low-carbon economy.
Charlie Gailliot, Partner and Co-Head of Global Climate Strategy at KKR, said:
“To support an economy-wide energy transition, there is a need to significantly expand renewable energy generation by 2050 and enable grid electrification. Because of these tailwinds, we see enormous opportunity for Avantus. The company’s impressive team and development track record, coupled with its mature project pipeline, set it apart from other renewables developers. We are delighted to support Avantus in realizing its full potential.”
Following the acquisition, KKR and existing investor EIG will be the sole equity investors in Avantus. According to KKR, the investors have secured commitments for a substantial development financing facility for Avantus, which, alongside their equity commitments, totals approximately $1 billion to support Avantus’ growth.
Cecilio Velasco, Managing Director in KKR’s Infrastructure team, said:
“We look forward to working with Avantus and EIG and leveraging KKR’s substantial resources and operational expertise to accelerate the growth of the business. Today marks the beginning of a new era for the company, one that will help further the transition of the power sector through sustainable, clean energy solutions.”
The acquisition is the latest in a series of energy transition infrastructure-focused moves for KKR, including the launch last week of a $3 billion takeover offer for German renewable energy platform Encavis, as well as the $1.7 billion acquisition in December of Scotland-based energy and electrifications solutions company Smart Metering Systems (SMS), a recent $750 million investment in London-based transport electrification and battery storage solutions provider Zenobē. KKR has also recently launched of a series of clean energy platforms including Virescent Infrastructure in India, Aster Renewable Energy in Asia and Stellar Renewable Power targeting long-duration high-yielding solar energy investments.
KKR said that it will support Avantus in creating an equity ownership program following the close of the transaction, enabling all employees of the company to participate in ownership benefits.
Patrick Goff, Chief Financial Officer at Avantus, said:
“Solar is the fastest growing electricity source in the U.S.2, and along with energy storage, will serve as the backbone of a modern electric grid that is clean, reliable and resilient. KKR’s investment provides Avantus the financial backing and expertise to execute on our ambitious portfolio and lead the energy transition across the Western United States. We are thrilled to embark on this new chapter with KKR and EIG and continue our company’s growth.”
Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.
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