NEW YORK - Atlantica Sustainable Infrastructure plc (NASDAQ:AY), a diversified operator of renewable energy and other infrastructure assets, has agreed to a buyout by a consortium led by Energy Capital Partners (ECP), a private equity firm specializing in energy infrastructure investments. The definitive agreement, announced today, will see Atlantica shareholders receive $22 per share in cash, valuing the company at approximately $2.55 billion.
The offer price represents an 18.9% premium over Atlantica's closing share price on April 22, 2024, the last trading day before speculation about a potential acquisition surfaced. It also marks a 21.8% premium on the 30-day volume-weighted average trading price up to that date.
The transaction will be executed via a scheme of arrangement under the U.K. Companies Act 2006. Atlantica's largest shareholder, Algonquin Power & Utilities Corp., along with Liberty (AY Holdings), B.V., collectively holding about 42.2% of Atlantica's shares, have pledged their support for the deal.
Michael D. Woollcombe, Chair of Atlantica’s Board of Directors, stated that after a thorough review process with external advisors, the board unanimously determined that the acquisition offers the best value for shareholders. Santiago Seage, CEO of Atlantica, expressed confidence in continuing the company's growth strategy as a private entity with ECP's backing.
Andrew Gilbert, a Partner at ECP, highlighted Atlantica's strong track record and the opportunity to accelerate its growth through the partnership.
Completion of the deal is subject to shareholder approval, sanction by the High Court of Justice of England and Wales, and various regulatory clearances, including under the Hart-Scott-Rodino Act and by the Federal Energy Regulatory Commission in the United States. The transaction is expected to close between the fourth quarter of 2024 and the early first quarter of 2025. Following the acquisition, Atlantica will become a privately held company, and its shares will be delisted from public markets.
Atlantica plans to maintain its current quarterly dividend of $0.445 per share until the transaction's closure, subject to board approval.
Citi served as Atlantica's financial advisor, while Skadden, Arps, Slate, Meagher & Flom (UK) LLP provided legal counsel. Latham & Watkins LLP advised ECP, and J.P. Morgan Securities LLC, along with Weil, Gotshal & Manges LLP, advised Algonquin.
This article is based on a press release statement issued by Atlantica Sustainable Infrastructure plc.
InvestingPro Insights
As Atlantica Sustainable Infrastructure plc (NASDAQ:AY) prepares for its transition to a private entity, a closer look at the company's financial health and market performance through InvestingPro data may offer shareholders additional insight into the value proposition of the acquisition.
Atlantica's market capitalization, prior to the acquisition announcement, stood at $66.74 million, a figure that underscores the scale of the buyout relative to the company's size. Despite a modest revenue growth of 3.44% over the last twelve months as of Q2 2024, the company's high P/E ratio of 245.74 signals that investors have been willing to pay a premium for its earnings. This premium is also reflected in an adjusted P/E ratio of 195.82 for the same period, which remains high even when accounting for near-term earnings expectations.
The company has also experienced significant price volatility, with a 20.8% drop over the last three months leading up to Y2024.D149. Nevertheless, Atlantica's financial stability is evident, as it holds more cash than debt on its balance sheet, a reassuring sign for investors amid the acquisition process. Additionally, the company's liquid assets exceed its short-term obligations, providing a cushion that may offer some degree of operational flexibility during the transition to private ownership.
For those looking to delve deeper into Atlantica's financial landscape, InvestingPro offers comprehensive analysis and additional InvestingPro Tips. Some key points to consider include the company's expected net income growth this year and analysts' predictions of profitability within the current fiscal year. With these factors in mind, shareholders may find further value in exploring the 10 additional InvestingPro Tips available, which can be accessed at: https://www.investing.com/pro/AY. To enhance your investing strategy, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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