3i Infrastructure (3IN) says it has received a binding offer for its c.33% stake in Valorem, an independent European renewable energy developer and power producer, from funds managed by AIP Management P/S alongside other co-investors. 3IN says that, subject to acceptance of the binding offer, which will follow consultation with Valorem’s employee representative bodies, 3IN expects the transaction to complete in the first quarter of 2025, following receipt of regulatory clearances.
3IN expects to receive net proceeds of approximately €309m, which is a c.15% uplift from its valuation of €268m at 31 March 2024, and 31% from the valuation as at 30 September 2023, before the sale process was initiated. Proceeds will be used to reduce the outstanding balance on 3IN’s revolving credit facility. 3IN adds that, at the point of exit, it expects to have achieved approximately 21% gross annual IRR and c.3.5x gross money multiple on its investment in Valorem.
About Valorem
3IN says that, since its initial investment in 2016, Valorem’s business model has been transformed from an asset developer to one of the leading independent renewable power producers in Europe. Valorem has also expanded its focus from French onshore wind generation to include solar and hydro generation across France, Finland, Greece and Poland. Since 2016, Valorem’s operational asset base has grown to over 850MW, a more than five-fold increase, and its development pipeline has grown to 6.6GW. During this time EBITDA has also more than quadrupled. 3IN adds that Valorem is well positioned for further growth supported by Europe’s energy transition, the ambition of European countries to grow their share of renewable power, as well as new growth opportunities such as battery storage to optimise power delivery.
Comments from Scott Moseley and Bernardo Sottomayor, managing partners and co-heads of European Infrastructure at 3i Investments
“3iN’s strategy is focused on helping our portfolio of defensive businesses achieve strong growth as they leverage underlying structural drivers in their markets. Through this approach we are able to deliver long-term sustainable returns for our investors.
“Valorem is a great example of this. Over the last eight years, we have worked closely with the team to support the company’s growth from a regional developer to an established leader in the European renewable power market.
“We will always be disciplined in our approach to value realisation and balance sheet management. This divestment provides us with the opportunity to crystalise a significant uplift to the carrying value, the proceeds of which will be used to reduce our drawings on our revolving credit facility.
“We thank the Valorem team for our successful collaboration and wish them and their new partners success on the next leg of their journey.”
