Infra big guns target Zenobe

Data InsightInside Infra 1 November

Infra big guns target Zenobe

Major infrastructure funds are mulling bids for a stake in UK battery storage and vehicle charging specialist Zenobe ahead of initial bids towards the end of the year. 

Global Infrastructure Partners (GIP), KKR Infrastructure, I Squared and Brookfield are among those circling the process, sources said, adding the deep-pocketed managers are attracted to the large build out potential of the company’s underlying portfolio. 

Expressions of interest were due on 3 November and non-binding offers are likely to be made in December, one of the sources said. 

Zenobe owns and manages large stationary batteries in bus depots as well as smaller ones on the buses themselves. It has a large share of the bus market with clients including bus operators such as Abellio. 

It also provides battery storage to utilities such as National Grid, which use them for maintaining correct electricity flow amid the growing use of intermittent renewable power sources. It also provides batteries for industrial consumers of electricity to help reduce their consumption during peak times. 

Aside from the UK, it is making moves into markets such as Australia and the Netherlands. 

The company is growing fast as decarbonisation efforts lead to greater battery use and has already secured hundreds of millions in funding. In 2020 M&G Investments infrastructure equity arm Infracapital paid GBP 150m for a majority stake, while earlier this year it raised GBP 241m of debt. 

Brookfield declined to comment. KKR, GIP and I Squared did not respond to requests for comment.A spokesperson for Zenobe confirmed that the fundraise is ongoing without giving details of the timing, and added that the new capital will come from both existing and new shareholders. 

Zenobe, which is also backed by JERA and its parent Tokyo Electric Power Company, has seen a sharp rise in its EBITDA, which has grown from negative GBP 8m in 2020 to GBP 4.2m at the end of last year, according to filings published recently. 

The company reported turnover of GBP 15m for the nine months to 31 December, up around 50% over the 12 months to 31 March last year – while its headcount almost doubled last year to 82. 

I Squared already owns a sizeable portfolio of power and renewables businesses, including Energia in Ireland, which is building on its onshore wind and energy retail arms by pushing into solar, battery, hydrogen and data centres sectors. The US manager also owns the large UK reserve power business Conrad Energy as well as power generator supplier Aggreko. 

GIP has invested heavily into European offshore wind businesses, including buying developer wpd’s operations this uear, but has not to date invested heavily into charging and batteries in Europe. KKR owns a sprawling portfolio of renewables worldwide, including Spanish developer Gestamp Solar. 

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