Energy Capital Partners to acquire Atlantica Sustainable Infrastructure for $2.5bn

In a significant development within the energy sector, Atlantica Sustainable Infrastructure plc (NASDAQ: AY) announced a definitive agreement whereby a private limited company incorporated in England and Wales, controlled by Energy Capital Partners (ECP), will acquire all shares of Atlantica for $22 per share in cash. This transaction values Atlantica at an equity value of approximately $2.555 billion, representing an 18.9% premium over the closing share price on April 22, 2024, and a 21.8% premium over the 30-day volume weighted average as of the same date.

Strategic Review Leads to Premium Acquisition

This acquisition is the result of an extensive strategic review by Atlantica’s Board of Directors, chaired by Michael D. Woollcombe, who emphasized that the deal “represents the best value maximizing alternative available.” The board’s decision received a strong endorsement from Atlantica’s largest shareholder, Algonquin Power & Utilities Corp., and Liberty (AY Holdings), B.V., which collectively hold about 42.2% of Atlantica’s shares. They have agreed to support the transaction, reinforcing its strategic importance.

Atlantica’s CEO, Santiago Seage, noted that becoming a private company under ECP’s leadership will allow Atlantica to continue its growth strategy focused on safety, sustainability, and value creation. ECP, known for its expertise in sustainable infrastructure, along with its global co-investors, aims to enhance Atlantica’s capabilities in financing and delivering growth.

Transaction Details and Future Prospects

The deal will be executed through a scheme of arrangement under the U.K. Companies Act 2006, with completion expected between the fourth quarter of 2024 and the first quarter of 2025. It is contingent on approvals from Atlantica’s shareholders, the High Court of Justice of England and Wales, and various regulatory bodies, including clearance under the Hart-Scott-Rodino Act, the Committee on Foreign Investment in the United States, and the Federal Energy Regulatory Commission.

Andrew Gilbert, a Partner at ECP, expressed enthusiasm about partnering with Atlantica, highlighting the company’s strong track record in managing a complex set of global assets. Post-acquisition, Atlantica will transition to a private entity, and its shares will be delisted from public markets. However, it plans to continue paying its quarterly dividend of $0.445 per share until the transaction closes.

Financial and Legal Advisors

The transaction drew on the expertise of top financial and legal advisors. Citi and Skadden, Arps, Slate, Meagher & Flom (UK) LLP advised Atlantica, while Latham & Watkins LLP represented ECP. J.P. Morgan Securities LLC and Weil, Gotshal & Manges LLP provided counsel to Algonquin, underscoring the transaction’s complexity and significance.