Acquisition of a European waste-to-value pyrolysis platform
M&A Transactions – Energy Transition
The Engagement:
Origination & Commercial Due Diligence
Waste Recycling Plant
The Client:
Global Infrastructure Investment Fund
Duration:
9 months
Transaction summary
- Our client was seeking platform investment opportunities in the recycling and waste-to-value sector, to allow for a scaled-up deployment of capital over a 3-5 years period
- The seller was seeking equity investment capital to fund the construction of a world-first commercial scale, 180,000 tonnes per annum waste tyre pyrolysis plant to convert end-of-life tyres (ELTs) into high-value products such as biofuels and chemical products
- Long-term feedstock supply and product contracts were secured
- There was an investment opportunity in the holding company, allowing for capital participation in a significant pipeline of additional plants in Europe and the US to become the global leader in waste tyre pyrolysis
- Initial investment of €50-75 million with runway to deploy up to €500 million over 5 years
Outcome
- Energex analysed and profiled the emerging ELT market across Europe and engaged directly with each of the major players to explore capital requirements, understand their business models and form a view on the commercial feasibility of each project
- Selected and presented an investment opportunity to our client and proceeded with detailed due diligence
- Built a financial model and 5-year business plan, with base, downside and upside cases
- Conducted a detailed analysis of feedstock supply dynamics, logistics and regulations.
- Conducted a detailed analysis of product off-take markets and pricing dynamics including subsidy regimes
- Took on board advice on technology ‘readiness’ from technical advisors
- Facilitated bilateral negotiations between our client and the target business.
- Transaction did not close owing to eventual irreconcilable differences in final deal structure