Aker buying 75% in Mainstream Renewable Power

Norwegian industrial investment company Aker ASA (FRA:FKM) will become the new majority owner of global wind and solar developer Mainstream Renewable Power in a deal involving a significant equity investment.

The parties announced today that the Oslo-based investor, through renewables platform Aker Horizons AS, will acquire 75% in Mainstream in a transaction valuing the current equity of the target at EUR 900 million (USD 1.09bn) on a 100% basis. It will make an additional earn-out payment of up to EUR 100 million in 2023 if certain milestones are achieved.

Under the terms of the agreement, Mainstream’s founder and chairman Eddie O’Connor and certain other existing shareholders will re-invest to keep a 25% stake in the renewable energy company. O’Connor will continue to be chairman of Mainstream’s board of directors, which will also be joined by new members Kjell Inge Røkke, Øyvind Eriksen and Kristian Røkke.

“[This partnership] means we can widen our scope for entry into new markets and further deepen and expand our leadership position in existing ones, such as in Chile where we will soon be supplying the equivalent of one in seven Chilean homes with power from our wind and solar facilities,” O’Connor commented.

Set up in 2008, Mainstream Renewable Power has to date developed and brought forward to financial close renewable energy projects with a combined capacity of about 6.4 GW. Currently, the company has 1.4 GW of net capacity in operation or under construction, mostly onshore wind and solar projects in Chile and South Africa. In addition, it has an advanced pipeline of 700 MW of net capacity that is expected to reach financial close this year, plus more than 9 GW of other schemes, not even counting a number of large-scale offshore wind opportunities.

Aker pointed at Mainstream’s significance as an offshore wind developer by saying that it worked on projects representing 22% of the UK’s offshore wind capacity in operation or under construction. This includes the 1.2-GW Hornsea One and 1.4-GW Hornsea 2 projects, which the company sold in 2015.

“We plan to bring 5.5 GW of renewable assets to financial close globally by 2023, which sets us firmly on track to becoming one of the world’s first pure-play renewable energy majors,” said Mary Quaney, CEO of Mainstream Renewable Power.

The company’s plans also include an initial public offering (IPO) within the next two to three years.

As part of the acquisition of Mainstream, Aker has also agreed to acquire a 50% stake in superconductor cables company SuperNode, which has developed technology to enable connecting offshore wind production efficiently with markets over longer distances. SuperNode was established in 2018 by Mainstream and Eddie O’Connor.

The transaction involving Mainstream is seen to wrap up in the second quarter of 2021, subject to regulatory clearance and approvals from the target’s creditors.

DNB Markets, the Norway branch of Nordea Bank Abp and Green Giraffe serve as financial advisors to Aker Horizons in the transaction, whilst Advokatfirmaet BAHR and Slaughter & May act as legal advisors. At the same time, Rothschild & Co was the financial adviser to Mainstream, while Linklaters, Byrne Wallace and Philip Lee took the role of legal advisors.

(EUR 1.0 = USD 1.211)

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