No value has been disclosed for the transaction, but sources close to the matter said the deal gives Viridian an enterprise value of about €1 billion.
I Squared will own the entirety of the business following the closing of the all-cash deal, which is expected for the second quarter of this year. The New-York firm has also pledged to pay down £145 million ($207 million; €185 million) of existing junior debt as part of the transaction.
Gautam Bhandari, a partner at I Squared, said the purchase was partly premised on strong economic momentum in Ireland, with GDP growing 7.5 percent last year – five times the EU average. He said the company would serve as a platform for further acquisitions, with possible bolt-on deals in Ireland and the UK.
Viridian claims to be the largest integrated energy company spanning the Republic of Ireland and Northern Ireland. It owns a portfolio of about 747MW of gas-fired combined-cycle capacity and 225MW of onshore wind, which includes both assets in operation and under construction.
In addition, the firm runs a 793MW portfolio of wind farms for third parties that are under long-term power purchase agreements. It expects this figure to increase to about 1GW in a little more than a year, once other plants become operational.
The company supplies electricity to about 610,000 homes and businesses, enjoying respective market shares of about 20 percent and 27 percent of domestic and business sales over the whole of Ireland. It generates an annual turnover of about €2 billion.
Arcapita, which bought Viridian in 2006, put the company on the block last year, with a deadline for first bids set at 15 January 2016. UK utility Centrica, which was said to be participating in the auction at the time, did not make it to the second round.
I Squared trumped rival bids from other shortlisted firms including India’s AES, Sweden’s EQT, Australia’s AMP Capital and the US’ Goldman Sachs Infrastructure Partners, according to reports. The New York-based firm is currently investing its $3 billion debut fund, which sources say is about 50 percent invested.
I Squared declined to comment on transaction details and fund deployment. All other firms cited above either declined to comment, did not respond to comment or could not be reached at press time.