3i Infrastructure buys AMP Capital out of offshore service firm Esvagt
3i Infrastructure has agreed to acquire the stake in Esvagt owned by its co-investor AMP Capital, it announced on Friday, resulting in it holding 100% of Esvagt.
The FTSE 250 company said the further investment was expected to total £268m, with completion subject to third-party consents, and expected to take place in the first quarter of 2022.
In its half-year results, 3i Infrastructure said that a strategic review of its holding in Esvagt was in progress, and that as part of that, offers had been invited.
However, the company retained its options of continuing to hold its 50% stake, to sell, or to offer to buy the AMP Capital stake.
Binding offers for 100% of the equity were received, but not at what the company considered a compelling price, and so it chose to offer to buy the AMP Capital stake.
3i Infrastructure described Esvagt as “the market leader” in the growing segment of service operation vessels (SOV) for the offshore wind industry.
The company is also a “leading provider” of emergency rescue and response vessels (ERRV) and related services, the firm added, to the offshore energy industry in and around the North Sea and the Barents Sea.
Since acquiring Esvagt in 2015, 3i Infrastructure and AMP had supported management in driving the company's shift in strategic focus towards SOVs and becoming a key enabler of offshore wind operations in Europe.
SOVs represented less than 10% of earnings at acquisition, but had grown to provide the majority of Esvagt’s contracted earnings today.
During the period, Esvagt had delivered six new SOVs, and had entered into a joint venture with Crowley in the United States to support the emerging offshore wind energy market there.
The offshore wind market, and thus demand for SOVs, was expected to grow strongly over the coming years, as a number of European governments and US states had set “ambitious” offshore wind build-out targets as part of their wider net-zero emissions plans.
“Esvagt’s transition into a market leader in European offshore wind has been a major achievement,” said chair Richard Laing.
“We believe that it is well-placed to benefit from continuing attractive growth prospects in the wind sector and we are delighted to be acquiring 100% of the business.”
At 1143 GMT, shares in 3i Infrastructure were down 0.13% at 343.05p.