London-based mid market private equity and private debt operatorThree Hills capital Partners is to invest 35 million euros in Building Energy, MF Milano Finanza writes today.
Founded at the end of 2010 by ceo Fabrizio Zago and some managers coming from big energy utilities, Building Energy is an Italian company specialized in building and managing plants for green energy production around the world, having a 2200 Mw pipeline in 24 countries and 430Mw plants in construction to be finalized by 2017.
Three Hills Capital Partners was founded in November 2013 by Mauro Moretti, an Italian former partner at Hutton Collins which he joined in 2008 from BC Partners. The team includes, in the role of partners, Leks de Boer, a former member of the investment team of Hutton Collins, and Michele Prencipe, who also worked at Hutton Collins as well as Italia private equity operator Clessidra sgr.
Three Hills will invest in Building Energy both by Three Hills Sicav-Sif (which raised 100 million euros) and by the new veichle Three Hills Decalia Sicav-Sif (still in fundraising).
More in detail, Mr. Moretti explained MF Milano Finanza that “Three Hills is committed to invest 35 million euros on the whole. Of that figure, 20 millions have been invested already subscribing a bond which has been listed on Borsa Italiana’s ExtraMot Pro market at the end of July, while other 10 million euros will be invested in a top up of that bond by the end of the year. Finally, we subscribed a capital increase for a 7% of the shareholders’ capital of Building Energy and for a minority stake in the holding where the managers’ stakes are retained”. Moreover, Moretti added, “we might invest more money in the next future to support Buliding Energy’s business development, alone or with some coinvestors”.
As for the bond maturing in 2020, the Admission document explains that it pays an annual fixed-rate cash coupon of 2% payable on a semestral basis, plus another annual 2% cash coupon payable on a semestral basis which might be deferred for 12 months, plus an annual 5% PIK coupon to be paid at maturity.
Building Energy has been advised by IIntermonte and PwC for the deal on financial matters and by Chiomenti law firm on leagl issues. Clifford Chance law firm supported Three Hills Capital Partners.
Building Energy announced an 8.5 million euros capital increase in June 2014 which was subscribed by Italian mid-market private equity firm Synergo sgr, which had been a shareholder of the company since June 2013 and raised then its stake to 32,2%. At the same time Building Energy announced the launch of a 50 million euros greenbond, but the company suspended the issue in the following months. After the new capital increase, Synergo sgr’s stake is down to 30% and the managers retain a 63% stake,
“When we thought of a greenbond last year we realized that our company is quite unique and that it needs to be well understood by investors due to our specific business and the countries where we operate so we decided to look for a private equity partner again”, Zago said.
The manager added that: “Proceeds from the bond will help the company to raise its financial flexibility and to accelerate its business growth in US, South Africa and East Europe. In the last few months we won international contests and we are building one of the biggest biomass plant in Africa (16MW), a 140MW eolic park, a mini-hydro plant (4.7MW) in South Africa and the first solar plant in Uganda (10MW). In the next few weeks we will start construction of a 30Mw eolic park in Iowa (Usa), of the second phase of a solar plant at the Cornell University in the State of New York and of a 45MW plant in Panama” (see here the press release).
