EQT makes USD-1.5bn cash bid for renewables developer OX2

Swedish private equity firm EQT AB (STO:EQT) on Monday announced a recommended offer to acquire compatriot renewables developer OX2 AB (STO:OX2).

The EQT Infrastructure VI fund, through Otello BidCo AB2, has proposed to buy all OX2 shares for SEK 60 apiece in cash, or a total price of SEK 16.35 billion (USD 1.51bn/EUR 1.34bn). The bid represents a 43.4% premium over OX2’s closing price on Nasdaq Stockholm on Friday, May 10.

The developer’s founder and largest shareholder Peas Industries, which holds 45.6% of the shares and votes in OX2, has undertaken to accept the offer, which is contingent on Otello BidCo acquiring more than 50% of OX2. The offer’s acceptance period is expected to start around June 25 and end around October 12 to allow for receipt of customary regulatory approvals, according to announcements by the companies today.

Commenting that OX2 has grown into one of Europe’s main renewables developers and that the renewables industry is supported by strong underlying trends, EQT Partners partner Christoph Balzer also said the following: “To unlock OX2’s full potential, we believe it would benefit from a transition to a more long-term, sustainable business model and becoming an integrated renewables developer and asset owner. EQT is well-suited to partner with the Company during this next phase, offering the necessary capital and deep industry expertise to accelerate its growth journey.”

According to Peas Industries chief executive Johan Ihrfelt, “the company will be well positioned under EQT’s ownership as it looks to undertake the next phase of its development.”

Set up in 2004 and based in Stockholm, OX2 currently operates in 11 markets across Europe and also in Australia. According to its latest quarterly report, the company's portfolio amounted to 47,223 MW on March 31, 2024, which includes a project development portfolio of 33,107 MW, sold MW with potential additional payments of 8,232 MW, projects under construction of 1,062 MW, and contracts under management for 4,823 MW.

OX2’s project development portfolio as shown in the company’s first-quarter report:

According to EQT’s press release, recent market conditions such as higher interest rates, long development timelines and supply chain disruptions have exerted some short-term pressures on OX2 and the company would benefit from transitioning from a pure developer to an integrated renewables developer and asset owner, while keeping its ability to sell projects.

EQT says that including this deal, EQT Infrastructure VI is expected to be 40%-45% invested.

(SEK 1 = USD 0.092/EUR 0.086)

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