- Zenith Energy (ZEN) has struck a deal with Elemental Infrastructure which will see it be purchased for roughly $150 million
- Elemental’s fund manager, Pacific Equity Partners (PEP) is leading the purchase under a scheme implementation deed
- Zenith’s Board of Directors have urged shareholders to approve the deal as it’s in their best interests
- PEP has cited Zenith as being a reliable energy solutions providers with a number of attractive assets
- Zenith’s shares have soared 37.4 per cent with shares trading for 95.5 cents each
Hybrid power solutions company Zenith Energy (ZEN) has struck a deal with Elemental Infrastructure which will see it be acquired for roughly $150 million.
Zenith and Elemental, an entity owned by Pacific Equity Partners, have entered a scheme implementation deed for the acquisition to go ahead, subject to shareholder approval.
As part of the scheme consideration, shareholders will receive $1.01 per share in cash. This represents an enterprise value of approximately $250 million.
The scheme consideration of $1.01 per share represents a 45.3 per cent premium to the last closing price of Zenith shares on March 6, a 45.5 per cent premium to the 1-week volume weighted average price (VWAP) on March 6 and a 40.5 per cent premium to the 3-month VWAP of Zenith shares on the same date.
Additionally, the Board is exploring the potential to pay a fully franked special dividend so that the total cash received by Zenith’s shareholders would remain at $1.01 per share. If this goes ahead, eligible shareholders may receive an extra benefit from the franking credits.
Zenith’s Board of Directors have urged shareholders that this is a highly beneficial and compelling deal.
“The recommended acquisition of Zenith by Elemental represents an excellent outcome for our shareholders, employees and stakeholders,” Executive Chairman Doug Walker said.
“The proposal delivers a significant premium and recognises the success of Zenith as a leading provider of reliable energy solutions in the Asia Pacific region,” Zenith Chairman Peter Torre said.
Pacific Equity Partners (PEP) is the largest private equity and infrastructure fund manager in Australia and New Zealand focused on buyout and capital growth transactions.
PEP’s Managing Director, Tony Duthie, is pleased to be leading the acquisition.
“Zenith has a high quality portfolio of contracted power generation assets and we look forward to joining with Doug, Hamish, Zenith’s wider management team and its committed and dedicated staff to grow the business further,” Tony said.
PEP considers this acquisition as strategic in backing another remote power company while providing it with “capital firepower”.
Aside from shareholder approval, the scheme can only go ahead subject to court approval, Foreign Investment Review Board, and other standard regulatory approvals.
Scheme meetings will be held over May and June, with the implementation date expected on June 22 2020.
Zenith is up a significant 37.4 per cent with shares trading for 95.5 cents each at 12:47 pm AEDT.