OSLO/LONDON- Norway's Aker Horizons, owned by investment firm Aker , will acquire a 75% stake in Mainstream Renewable Power in a deal that values the wind and solar company at up to 1 billion euros ($1.21 billion), the companies said on Tuesday.
The deal values Mainstream at 1 billion euros, when including a potential payout of up to 100 million euros in 2023, which depends on the company's performance.
"Through the acquisition of Mainstream, Aker Horizons will gain a platform to drive forward its renewable energy ambitions and position itself in a growing market for hybrid projects," Aker Horizons CEO Kristian Roekke said.
The aim, Roekke later told a conference call, is to turn Mainstream into a "renewable energy major", with a planned initial public offering and listing of Aker Horizons on the Oslo stock exchange within 12 months, with Mainstream's own by 2023.
Mainstream has developed several wind and solar projects including Britain's Hornsea 2 offshore wind project before selling it in 2015.
Aker, traditionally focused on oil and gas, has launched new businesses focusing on carbon capture and storage (CCS) and offshore wind, while at the same time remaining the top owner in oil firm Aker BP AKERBP.OL and oil services firm Aker Solutions.
Aker shares were up 8% by 1057 GMT, outperforming a 0.8% rise in Oslo's benchmark index.
Mainstream said the investment would help accelerate its plans to bring 5.5 gigawatts (GW) of renewable projects to financial close by 2023, ahead of the planned IPO.
"It means we can widen our scope for entry into new markets and further deepen and expand our leadership position in existing ones, such as in Chile," Mainstream founder Eddie O’Connor said.
Mainstream has 1.4 GW of onshore wind and solar assets primarily in Chile and South Africa in operation or under construction, a pipeline of 700 MW in projects expected to reach financial close in 2021, and more than 9 GW in other development assets, Aker said.
The transaction is expected to close in the second quarter of 2021.
(Reporting By Susanna Twidale in London and Victoria Klesty in Oslo; Editing by Robert Birsel, Gwladys Fouche and Louise Heavens) ((firstname.lastname@example.org; +44 207 5424753;))