(Sharecast News) – Bridgepoint announced the acquisition of most of Energy Capital Partners in a cash and share transaction to create a €57bn global private markets asset manager.
Group chairman, William Jackson, said: “We have a high bar for strategic M&A, and ECP is one of the few platforms we have identified which clearly surpasses it, both from a strategic and financial perspective.
“As well as the compelling financial rationale for the transaction, Bridgepoint will benefit from the investing expertise of the ECP team, while at the same time there are significant opportunities for both of us to work together on initiatives such as adding adjacent strategies and expanding geographically.”
The private equity investor said that it would pay out £233m in cash and a further £423m in newly issued Bridgepoint shares, for a total enterprise value of £835m.
ECP’s existing debt stood at £179m.
More specifically, Bridgepoint said it was acquiring 95% of ECP’s Fee Related Earnings with Sumitomo Mitsui retaining the remainder.
It was also purchasing as much as 15% of the carried interest in more recent historic funds and at least 30% of future funds.
That was alongside half of the GP co-investments in more recent historic funds and at least 65% of GP co-investments for future funds.
The sale was expected to be accretive to Bridgepoint’s shareholders in EBITDA and net income terms from the day of closing.
Bridgepoint added that following the transaction it would split its roles of chairman and chief executive officer.
William Jackson would continue to chair the private equity operations while Raoul Hughes, a group managing partner, would assume the role of group CEO.
The company also announced that it would launch an additional £50m share repurchase program once the existing one had been completed “given the attractive fundamental value and prospects of the company”.