A consortium that included private equity giant KKR & Co and Canadian pension funds Ontario Teachers and PSP Investments is acquiring Australia’s Spark Infrastructure in a deal that values the company at A$5.2 billion (about $3.78 billion).
In a statement Monday, Spark Infrastructure, which operates an electricity distribution network in Southern Australia, said it has agreed to accept the consortium’s offer of A$2.95 per share, a 13.5% premium to the company’s last market close.
It was the third offer made by the consortium. It first offered to take over the company for A$2.70 per share and then sweetened the bid to A$2.80. Both offers were declined by Spark.
For the third offer, at A$2.95 per share, Spark said it has agreed to the terms of the deal, which will see the consortium acquiring all the units in the Spark Infrastructure Trust through a trust scheme and all of the loans notes issued by Spark RE.
Under the agreement, Spark Infrastructure securityholders can receive a total value of A$2.95 cash per stapled security, comprising cash consideration from the consortium of approximately $2.7675 per stapled security, Spark Infrastructure’s interim distribution for 2021 of 6.25 cash per share (cps), plus a franked special distribution expected to be approximately 12.00 cps.
Spark said the consortium’s offer is subject to a number of conditions that may delay the intended scheme meetings to be held by the end of 2021.
If the schemes have not been implemented by 15 February 2022, Spark Infrastructure securityholders will be entitled to additional cash consideration of 1.00 cps on 15 February 2022 and approximately 1.00 cps per month for every day thereafter up to the date of implementation.
“Spark Infrastructure’s businesses will continue to play a critical role in the transformation of Australia’s energy sector. The investments we have made in distribution, transmission and renewables put Spark Infrastructure front and centre of Australia’s low-emissions energy future,” said Spark Infrastructure managing director Rick Francis.
Spark owns stakes in a range of power-distribution assets in Australia, including SA Power Networks and Powercor. It was also part of the consortium that acquired the TransGrid electricity distribution network from the New South Wales state government.
Its businesses serve over 5 million homes and businesses and are also heavily involved in supporting the transition in Australia’s electricity system to one that is increasingly reliant on renewable energy.
“The consortium takes its role as a steward of critical infrastructure seriously and we look forward to working with our partners and stakeholders to support Australia’s energy transition and decarbonisation efforts,” according to the consortium.