(PRNewswire) Actis has reached an agreement to sell Guatemalan electricity distribution company Energuate to I.C. Power. The transaction is expected to close by the end of January.
I.C. Power, a wholly-owned subsidiary of Kenon Holdings Ltd. (NYSE: KEN; TASE: KEN) (“Kenon”) announced today the execution of an agreement with Deorsa-Deocsa Holdings Ltd (“DDHL”), an investment company of Actis LLP, a private equity firm, pursuant to which, IC Power has agreed to acquire from DDHL 100% of a holding company that indirectly owns 90.6% and 92.7% of two operating companies that operate an electricity distribution business in Guatemala and 100% of two smaller related businesses (the acquired businesses are referred to as “Energuate”).
The Energuate business includes two electricity distribution companies in Guatemala that provide services for approximately 1.6 million households in Guatemala (representing approximately 60% of Guatemala’s distribution clients) and distribute energy to approximately 100,000 km2 in Guatemala, covering approximately 10 million inhabitants. These companies together operate approximately 33,000 km of distribution lines within Guatemala (representing approximately 94% Guatemala’s distribution lines). In 2014, these companies sold 2,160 GWh of energy, representing 35% of the total energy consumed in Guatemala in 2014. The Energuate business includes two smaller companies: Comercializadora Mayorista de Electricidad, S.A., an electricity trading company that provides services to large customers and Redes Electricas de Centroamerica, S.A., a transmission company that owns and operates 31 km of transmission lines and eight sub-stations.
IC Power has agreed to pay $299.5 million for the purchase of the Energuate business (based on its March 31, 2015 financial results), and IC Power expects to assume the total financial debt of the Energuate business of approximately $289 million, as of November 30, 2015. The final purchase price is subject to purchase price adjustments for working capital, outstanding indebtedness and transaction related expenses. IC Power expects to fund this payment through cash on hand and a new $120 million loan facility. The acquisition agreement contains customary representations and warranties, and the acquisition of Energuate is subject to the satisfaction of customary closing conditions. IC Power anticipates that the acquisition will be closed during January 2016.