Arcapita Bank B.S.C.(c), a leading international investment firm, headquartered in Bahrain, announced the successful completion of the $4.2 billion acquisition of Viridian Group plc, the Northern Ireland based electricity utility, after having received final shareholder and court approvals.
This constitutes Arcapita’s largest single investment and brings to over $18 billion the total value of Arcapita’s transactions to date. Viridian offers Arcapita’s investors an attractive combination of reliable earnings, combined with potential for capital growth.
Viridian operates both regulated and unregulated businesses within the Irish energy market. The regulated side manages 45,000 kilometers of transmission and distribution infrastructure, supplying nearly 800,000 homes and businesses within Northern Ireland. The unregulated side focuses on power generation within the Republic of Ireland. A third division of Viridian offers power related services to the power industry.
Commenting on the transaction, Atif A. Abdulmalik, CEO of Arcapita, said “This acquisition represents a very high quality addition to our portfolio and further supports our efforts to provide Gulf investors with a unique and well diversified investment opportunity. Viridian is a diversified asset that offers steady and predictable earnings from the regulated side of the business, a feature attractive to our investors. Furthermore, the predicted growth in demand for electricity throughout Ireland should present substantial opportunities in the unregulated side of the business, and Viridian is well placed to grow market share significantly.”
The acquisition was sourced from Arcapita’s London office after a lengthy analysis of opportunities in the infrastructure sector. “Arcapita has developed considerable expertise in infrastructure investments, and Viridian joins South Staffordshire, a UK water utility, Zephyr, a UK portfolio of windfarms, and Falcon Gas, a US gas storage utility, in our portfolio of infrastructure assets”, said Asim Zafar, head of Arcapita’s asset based line of business. “Viridian’s current management team has an impressive track record. We believe it is the right team to take advantage of the opportunities that will present themselves to Viridian, as electricity demand grows and the region moves towards a single electricity market for the entire island.”
Viridian is the third major European acquisition of 2006 for Arcapita. In August, the bank completed the €650 million acquisition of Paroc, a leading manufacturer of insulation products, and in March, it completed the $200 million acquisition of Roxar AS, a technology solutions provider to the oil and gas industry. It also follows the successful exits of Loehmann’s, the US fashion retailer, and two US-based assisted living real estate portfolios, for a total of $825 million.
