Private equity firms Kohlberg Kravis Roberts and EQT have made first round bids for the $2bn Zenith Energy, along with Morgan Stanley Infrastructure Partners.
Expectations are that PEP will sell just a stake in the renewable energy producer. Some suitors are said to be struggling to make the numbers work for an all-of-company deal at a price that would satisfy its private equity owner.
Azure Capital and RBC are working on the sale, or “refinancing” as it is being described.
MSIP is working with Jefferies, EQT, UBS and KKR Gresham.
The Australian-listed gas pipeline owner APA opted not to put in a bid after earlier hiring advisers Barrenjoey and Morgan Stanley for an attempt to buy the business.
Zenith Energy provides contracted power to miners in remote locations. It is understood to generate well over $120m of annual earnings before interest, tax, depreciation and amortisation.
Sources say the prime reason for the process is to inject capital into the business to fund growth.
As well as PEP, Canadian pension fund OPTrust owns a stake worth about $450m in Zenith Energy.
Zenith Energy has more than 710 megawatts of capacity under contract or in development. It helps clients reach net zero renewable energy goals through sustainable fuel sources and new technologies. It offers tailored microgrids for remote off-grid power and grid-connected precincts.
The business was founded in 2006 by chairman Doug Walker, who was a founding director and key executive of StateWest Power, one of Australia’s largest privately owned independent power producer companies, which was subsequently acquired by Wesfarmers Energy.
Zenith’s first major contract was signed with Chevron in 2008 for the company’s Barrow Island facilities.
PEP purchased Zenith Energy in 2020 for $250m including debt, or about $150m equity, in a deal advised by Highbury Partnership and Minter Ellison.
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