March 22, 2024 | Energy | Europe | Active

Encavis / KKR-led Consortium: Deal Insight

Power and energy producer Encavis has agreed to be acquired by US private equity firm KKR in a €2.8bn voluntary public takeover under German law. Viessmann (private), a German, family-owned heating and refrigeration manufacturing company, will join KKR as a “significant minority” co-investor. KKR is offering €17.50 per share, representing a 54.2% takeover premium to Encavis’s undisturbed price on 5-Mar-24, before the company announced it was in discussions with KKR. Encavis’ management and supervisory boards have approved the transaction and intend to recommend shareholders to accept the offer, pending their review of the offer document. Their support will be conveyed through a joint reasoned statement, expected to be published after the offer document is dispatched. There is a 54.285% minimum acceptance condition, a threshold established to ensure that at least 50% is secured after factoring in potential conversions by convertible bondholders. Encavis anticipates that only a few convertible holders will exercise their conversion rights since the adjusted conversion price is worth over €18.00, surpassing the €17.50 offer consideration. KKR has separately secured binding agreements from multiple Encavis shareholders who collectively hold nearly 31% of Encavis. These have been named as Abacon Capital and several unidentified existing shareholders, and they have expressly offered to support the offer and are expected to remain as “indirect long-term investors” in Encavis. According to the M&A release, of the 31% of support, approximately 13% will be rolled over, while the remaining 18% will be sold to KKR. Otherwise, completion is subject to foreign investment clearances and antitrust approvals. The announcement did not ...

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