Equistone Partners Europe and Inflexion Private Equity said May 31 that they have agreed to sell UK Power Reserve to Sembcorp for 216 million pounds ($252.2 million). UK Power develops and operates flexible power generation in the that country. RBC and Addleshaw Goddard advised Equistone and Inflexion.
Inflexion and Equistone agree sale of UK Power Reserve to Sembcorp
London, 31 May – Equistone Partners Europe (“Equistone”) and Inflexion Private Equity (“Inflexion”) today announce that they have reached an agreement for the sale of UK Power Reserve (“the company”), a leading independent developer and operator of flexible power generation in the UK, to Singapore-headquartered integrated energy group, Sembcorp, for an equity value of £216m. Following the acquisition of shares, Sembcorp will consolidate all assets and liabilities of UK Power Reserve, including its net debt.
Headquartered in Solihull, UK Power Reserve was founded in 2010 to meet growing domestic demand for highly flexible reserve power capacity. Since Inflexion and Equistone’s joint investment in the company in late 2015, UK Power Reserve has more than trebled capacity to over 500MW – enough to power 375,000 homes in local communities – delivered from 32 rapid-response power stations across England and Wales. The company has grown its revenues from c.£20m to over £80m and its employee headcount from 70 to 150 under Equistone and Inflexion’s ownership.
Under the ownership of Sembcorp, a further 480 MW in construction and development is expected to come online by 2019, including 120 MW of battery storage assets – one of the biggest such portfolios in Europe. In the UK, factors such as the growth in intermittent renewables, the closure of existing conventional generation and the rise of electrification of the transport sector are leading to increased volatility in the power market. This has generated a greater demand for flexible capacity, which has become the fastest growing sector in the country’s power market today.
Simon Turner, Managing Partner at Inflexion, commented: “UK Power Reserve has been a pioneer in the sector taking advantage of the rapidly changing market. In our two and a half year partnership, we worked closely with the entrepreneurial management team to double UKPR’s headcount and portfolio, whilst simultaneously quadrupling its revenue. Changing market dynamics posed an opportunity for the business to scale, and we were well placed to assist them with this. We wish the business every success as it embarks on its next chapter.”
Phil Griesbach, Partner at Equistone Partners Europe in Birmingham, said: “In UK Power Reserve we saw an entrepreneurial management team capable of seizing upon fundamental changes caused by the shift towards renewable energy sources and rapidly scaling the business to meet the consequent demand for flexible power generation. The highly impressive growth of the business under our ownership has been a clear validation of the faith we placed in CEO Tim Emrich and his outstanding team to successfully navigate this changing landscape.”
Tim Emrich, Co-Founder and outgoing CEO of UK Power Reserve, said: “I’d like to thank both Equistone and Inflexion for their partnership over the last two and a half years. It has been a pleasure to work with them throughout their investment. Their strategic direction has been instrumental in supporting the significant growth of UK Power Reserve which is now very well positioned for future growth as part of Sembcorp. In Sembcorp, UK Power Reserve has found a strong new shareholder and a good strategic fit. As I hand over to Sam Wither, our current Chief Commercial Officer, who takes over as head of the business, I am confident that the company is in good hands, and that it is set to power forward as part of Sembcorp’s integrated energy business here in the UK.”
Equistone and Inflexion were advised by RBC (corporate finance) and Addleshaw Goddard (legal).
The investment was made by funds managed by Equistone Partners Europe Limited and affiliated funds advised by Inflexion Private Equity Partners LLP.