First State Investments and KKR have entered into an agreement by which Coriance, a French district heating company which is currently owned by KKR’s infrastructure funds and a co-investor, will be acquired by First State Investments managed infrastructure funds. The proposed transaction is subject to customary approvals. No financial terms were disclosed.
Coriance operates a portfolio of 29 regulated district heating concessions in France, under which it supplies heat to residential, social and commercial buildings, and sells cogenerated electricity to state-owned utility EDF. The company also provides energy services in the heating sector.
Yves Lederer, CEO of Coriance, said: “We have really appreciated the period working with KKR as our investor – the relationship between shareholders and management was excellent. We have developed our business considerably and have grown renewable energy production as a percentage of our total energy production from 34% in 2012 to 60% in 2015. Our company is well placed to take advantage of increasing demand in public tender processes for heating solutions based on renewable energy. We look forward to taking the next step in our development together with First State, whose profile and objectives fit perfectly with those of Coriance as a business.”
Marcus Ayre, Partner, Infrastructure Investments at First State Investments, said “We are delighted that Coriance will become First State’s inaugural infrastructure investment in France. Coriance’s position as a leading operator of sustainable, reliable district heating network concessions with a strong positive environmental dimension is especially attractive to us as a long-term investor. We look forward to working closely with the Coriance management team and employees to further develop the company.”
Jesus Olmos, Member & Global Co-Head of Infrastructure at KKR, said: “KKR has built a strong track record of investing in infrastructure, including in energy generation and supply. As a business owner, we have strong and proven expertise in helping companies to adapt to changing environmental trends and regulation, and that has been a key part of the success at Coriance. Together with Coriance’s exceptional management team, we are proud to have built a larger, more successful and more sustainable company, which is well positioned to continue to deliver on its strategic development plan together with First State Investments.”
RBC Capital Markets acted as financial adviser to KKR on this transaction. KKR’s other advisers included Clifford Chance, Simpson Thacher & Bartlett, KPMG, Poyry and Marsh.
Lazard Frères and DC Advisory acted as financial advisers to First State Investments. First State Investments’ other advisers included Deloitte, Allen & Overy, Watson Farley & Williams, Atkins, E-Cube and Willis Towers Watson.