OX2, a Swedish firm, has agreed to buy Australian renewable energy developer ESCO Pacific for $83.9 million. The deal’s conditions also permit a consideration of up to A$17 million, based on the accomplishment of sales and margin goals, in addition to the agreed consideration, which is on a debt-free basis.
ESCO Pacific is owned by Shell, which holds a 49 per cent stake, along with founder Steve Rademaker and private investors. The aim is to complete the acquisition by the end of April 2023. Rademaker will remain with the firm for two years, initially in the role of managing director and then as an advisor to management. OX2 and Shell will keep collaborating in the interim, including through power purchase agreements (PPA) offtake opportunities.
ESCO Pacific was founded in 2015 and currently employs 21 employees. Its portfolio totals 1.4 GW, including 200 MW of energy storage and 1.2 GW of solar power. Within the portfolio, 317 MW is in the late phases of development, 395 MW is in the middle stages, and 708 MW is in the early stages. In addition, the company claims to have several early-stage projects that will be added to its development portfolio in 2023.
Through its sales of rights and turnkey solutions as building gets underway, ESCO is anticipated to provide significant potential for value creation. By acquiring solar and energy storage projects, expanding onshore wind, and investigating offshore wind and hydrogen projects, OX2 seeks to scale up operations. The firm expects the acquisition to contribute positively to its results next year and beyond.
