Greencoat Capital has reached an agreement to sell Schroders a 75% shareholding, for an initial consideration of £358m.
Greencoat is one of Europe’s largest renewable infrastructure managers, with £6.7bn of assets under management as of 30 November 2021.
Schroders and Greencoat have “an ambition to be a global leader in this fast-growing and important investment sector”.
As part of Schroders, Greencoat’s growth and its offering to clients will be “significantly enhanced, benefitting from Schroders’ distribution reach, sustainability capabilities, management experience and brand”.
Greencoat will become part of Schroders Capital, Schroders’ private markets division and be known as Schroders Greencoat.
The deal, expected to close in the first half of 2022, includes a potential earn out, payable three years after completion, which is subject to stretch revenue targets, the continued employment of the senior management team in the Greencoat business and is capped at £120m.
The purchase price will be settled in cash.
A series of options, exercisable by Schroders or the Greencoat management shareholders, are in place for Schroders to acquire the remaining 25% shareholding over time at a price based on a fair market valuation at the time of the option exercise.
Greencoat has a track record of delivering significant year on year growth, delivering compound AUM growth of over 48% per annum over the last four years to 31 March 2021 with revenues growing by 36% over the same period.
Greencoat’s revenue and pre-tax profits for the twelve months to 31 March 2021 was £38.2m and £20m respectively.
Gross assets as of 31 March 2021 were £19.1m.
In the period since 31 March 2021, Greencoat has generated net new raises and commitments of £1.1bn and had £6.7bn of AUM at the end of November 2021.
The US and European market for renewable energy assets is forecast to grow by more than $1tn to 2030.