A consortium led by Hong Kong’s CK Infrastructure said on Thursday it would buy German metering and energy management group Ista in a deal valued at up to 4.5 billion euros (US$5.25 billion).
The deal could be Germany’s second largest by a private equity firm if buyout groups Bain Capital and CinvenStada succeed in buying generic drugmaker Stada.
CKI, part of conglomerate CK Hutchison Holdings, controlled by Hong Kong’s richest man Li Ka-shing, is acquiring Ista from private equity firm CVC Capital Partners. CKI, Cheung Kong Property Holdings and Midco 5 have formed a joint venture to acquire the company, the firms said in statement filed with the Hong Kong exchange.
CVC confirmed the sale of its majority stake in Ista in a separate statement.
The deal is being closely watched by investors ahead of the planned sale of Ista’s peer Techem by Australian infrastructure investor Macquarie Group in the autumn, sources have said.
Ista, which provides energy and water metering, posted earnings before interest, taxes, depreciation and amortization (EBITDA) of 370 million euros in 2016 on sales of 850 million euros.
Buyout group CVC, which bought Ista in 2013 at a valuation of 3.1 billion euros, had hoped the company to be valued at 5 billion euros, people familiar with the matter said last month.
Reuters reported on Tuesday that CKI was seen as the frontrunner to buy the German company. CKI has a market capitalization of HK$190 billion (US$24 billion) and is invested in electricity generation and distribution, gas distribution, oil pipelines, water supply and wind power.
Update: Canada Pension Plan Investment Board holds a minority stake in Ista, obtained in 2013 as part of CVC’s acquisition. CPPIB reportedly teamed up with Blackstone Group to bid for the whole company.
Reporting by Anusha Ravindranath in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Ista