InfraVia acquired majority stake in GIGA Storage

Stem op deze deal via de stempagina: https://mena.nl/genomineerden-best-deal-2024/

Name of the deal: InfraVia acquires majority stake in GIGA Storage
Date announced and/or closed: 15-may-2024 (announced) / June-2024 (closed)
Published value: more than 250m
Buyer(s): InfraVia Capital Partners
Target: GIGA Storage
Seller: Company founders and Rabo Investments

Involved firms and advisors

Involved firms and advisors buy side:
M&A and debt advisor: ABN AMRO
Legal: A&O Shearman
Transaction services and tax: PwC  Commercial: Timera Energy / Pondera  Technical: AFRY

Involved firms and advisors target:
See sell-side

Involved firms and advisors sell side:
M&A advisor: Rabobank
Legal: Clifford Chance
Transaction services: KPMG
Technical: DNV  Commercial: KYOS / EnAppSys

Pitch

Brief description deal / Deal outline
InfraVia Capital Partners, a prominent European infrastructure investor, has acquired a majority stake in GIGA Storage, a Dutch developer of Battery Energy Storage Systems (BESS), from the founding shareholders and Rabo Investments. The acquisition, announced on May 15, 2024, is a significant milestone aimed at accelerating GIGA Storage’s expansion of large-scale BESS projects in the Netherlands and Belgium.

Founded in 2018, GIGA Storage is a key player in the BESS sector and specializes in utility-scale battery projects. The company integrates the entire value chain, from development and construction to operation, offering services to utilities and network operators. GIGA Storage has a strong focus on innovation and sustainability, managing operational assets in the Netherlands and developing a near-term pipeline of 2 GW across the Benelux region. The company’s long-term goal is to reach 5 GW of battery storage capacity by 2030.

The investment by InfraVia will help accelerate GIGA Storage’s efforts to support the energy transition in both countries. The founder-led management team will retain a significant stake and continue to lead the company as it moves into this new phase of accelerated growth.

About InfraVia Capital Partners
Founded in 2008, InfraVia is a leading independent European private equity firm, specialized in Infrastructure, Real Assets (Critical Metals, Real Estate) and Technology investments. InfraVia supports entrepreneurs and companies in their growth journeys and helps them expand their businesses into top-tier platforms. Since 2008, InfraVia has raised EUR 12 billion of capital and invested in 50+ companies across Europe.

About GIGA Storage
GIGA Storage is a developer, investor, and operator of large-scale energy storage projects in Europe. The company’s mission is to accelerate the shut-down of fossil-fueled power plants by realizing large-scale energy storage systems and by operating these systems via a cutting-edge, proprietary BESS IT platform. GIGA Storage is contributing to connecting more renewable energy projects to the grid, resulting in more efficient use of that electricity grid. GIGA Storage was founded in 2018 and is the market leader in the Netherlands.

Why should this deal win the Award for Best Deal 2024?
InfraVia Capital Partners has acquired a majority stake in Dutch battery energy storage system (BESS) developer GIGA Storage, a landmark transaction poised to significantly enhance Europe’s renewable energy infrastructure. Announced in May 2024, this deal is seen as transformative for both GIGA Storage and the energy storage sector in the Netherlands and Belgium. The investment will enable GIGA Storage to expand its capacity to develop, build, and operate large-scale BESS projects, with a concrete 2 GW project pipeline across these two countries. This partnership aligns with GIGA Storage’s broader goal of achieving 5 GW of battery capacity by 2030, positioning the company as a leader in energy storage in Northern Europe.

The acquisition process was highly competitive, attracting interest from leading infrastructure investors, including EQT Infrastructure, Partners Group, and DIF Capital Partners, with InfraVia ultimately securing the deal. This competition reflected the rising importance of the BESS market, as Europe’s energy sector increasingly turns to renewable solutions. ABN AMRO advised InfraVia on M&A and debt aspects of the transaction, while legal advice came from Clifford Chance for the sellers and A&O Shearman for InfraVia.

Founded in 2018, GIGA Storage has already made significant strides in the BESS space, launching two large-scale projects in the Netherlands: the 12 MW Rhino project and the 25 MW Buffalo project in Lelystad. Among its advanced pipeline are Project Leopard, a 300 MW four-hour BESS at the former aluminum smelter site Aldel in the Netherlands, and two major projects in Belgium: the 300 MW Project Marlin and the 600 MW Project Green Turtle, the largest energy storage project in Europe.

This acquisition marks a key moment in the Dutch energy transition, recognized as the 2024 Best Deal in the Netherlands. The transaction’s excellence in execution and strategic foresight has been widely praised. It not only accelerates GIGA Storage’s growth but also helps advance critical energy storage projects that will underpin the renewable energy sector. The projects supported by this partnership will help align growing intermittent renewable energy generation with increasing electricity demand, thus maintaining grid stability and promoting the decarbonization of Europe’s power mix.

The BESS market is maturing rapidly, with other major players like Shell-backed Sonnen, Ju

in Germany, and Recap Energy Storage in Sweden, indicating a broader European shift towards renewable energy storage. InfraVia’s investment in GIGA Storage further underscores the growing strategic importance of BESS to meet Europe’s energy transition goals. In fact, InfraVia has also shown interest in other energy storage projects, such as its participation in Project Verdi, a bid for a stake in Italian utility Enel’s battery portfolio, which highlights the firm’s focus on expanding its renewable energy footprint across the continent.

The GIGA Storage transaction was marked by exceptional competitive dynamics and rapid execution, as the company was simultaneously advancing market-defining projects. These include Project Leopard in the Netherlands and Project Green Turtle in Belgium, which are poised to be key milestones for the energy storage sector. The partnership with InfraVia brings not only capital but also strategic vision and expertise, enabling GIGA Storage to optimize its operations and accelerate the roll-out of its ambitious growth plans.

This deal also played a critical role in educating the market about the untapped potential of energy storage, with innovative financial structures and revenue models contributing to broader understanding and future investment opportunities in the sector. The ability to navigate the complexities of the deal, including due diligence and risk management, demonstrated the agility and determination of the teams involved.

Overall, the transaction exemplifies excellence in collaboration, innovation, and positive environmental and social impact. By aligning renewable generation with growing electricity demand, GIGA Storage’s projects will play a pivotal role in Europe’s energy transition, cementing this deal as a benchmark for success in the fast-evolving energy storage landscape.

Deal rationale
InfraVia Capital Partners’ acquisition of GIGA Storage is strategically focused on securing the company’s future project pipeline and establishing a robust platform for further Battery Energy Storage System (BESS) operations across Europe. The capital infusion from InfraVia will enable GIGA Storage to advance its 2 GW project pipeline in the Netherlands and Belgium, while also working towards its ambitious target of 5 GW BESS capacity by 2030.

As InfraVia’s first BESS asset, GIGA Storage will become a foundational platform for future investments and developments in the renewable energy storage sector, reinforcing InfraVia’s commitment to green infrastructure. The partnership not only accelerates GIGA Storage’s growth but also positions the company to lead the energy transition across Europe.

Ruud Nijs, CEO of GIGA Storage, emphasized the strategic alignment between the two companies and the significant opportunities the partnership offers: “Our ambition is to have a multiple of GWs of installed energy storage power in Europe in the years to come,” Nijs said. “By combining our expertise with InfraVia’s extensive resources and industry knowledge, we are poised to make significant strides towards reaching this ambition and driving positive environmental impact.”

GIGA Storage, facing a substantial pipeline of utility-scale energy storage projects that require massive investment, sought a partner to support its next phase of growth. The combination of GIGA’s proven expertise, track record, and execution skills, with InfraVia’s extensive resources and industry knowledge, positions the company to create a leading energy storage platform in Northern Europe.

What is the impact of this deal for the company?
The capital provided by InfraVia Capital Partners is pivotal for GIGA Storage to roll out its extensive project pipeline and achieve its ambitious growth objectives. This investment will empower GIGA Storage to advance its project pipeline in the Netherlands and Belgium and work toward its target of 5 GW BESS capacity by 2030. The infusion of funds solidifies GIGA Storage’s position as a key player in the European BESS sector. This partnership with InfraVia not only secures GIGA Storage’s future projects but also establishes a strong foundation for its long-term growth and impact on Europe’s energy transition.

Athanasios Zoulovits, Partner at InfraVia, expressed enthusiasm about the partnership’s potential to drive positive change in the energy sector: “We are thrilled to welcome GIGA Storage into the InfraVia family. This partnership underscores our conviction that BESS is an enabler to the decarbonisation of the European power market. We are excited to partner with the founders and management team of GIGA Storage, a team with a proven track record and great execution skills, to help them roll out an ambitious growth plan.”

The transaction marks a key milestone for the company and will accelerate GIGA Storage’s growth in the development and operation of large-scale BESS sites that will underpin the energy transition initially in both countries. GIGA’s founder-led management team retains a significant stake in the company and will continue to lead GIGA Storage during this new accelerated phase of growth, backed by InfraVia’s network and financial firepower. Furthermore, with the professional support of InfraVia, GIGA Storage has the bandwidth to explore additional growth avenues to secure its position as a leading energy storage platform, including the further development of IT connectivity with energy markets and external energy storage customers, as well as shaping the GIGA trading optimizer.

What is the impact of this deal for the direct stakeholders?
The capital infusion from InfraVia Capital Partners has enabled the management of GIGA Storage to further develop the company’s extensive project pipeline, making this strategic investment critical in advancing GIGA Storage’s ambitious plans. With this support, GIGA Storage is poised to play a crucial role in providing essential Battery Energy Storage System (BESS) services to the heavily congested Dutch grid, which TenneT has estimated will require approximately 9 GW of BESS capacity by 2030.

GIGA Storage will serve as a strategic platform for InfraVia’s further operations in the BESS sector across Europe, leveraging its in-house trading capabilities to effectively manage and optimize energy storage solutions. This partnership positions GIGA Storage as one of the few independent storage platforms in the Netherlands, enabling the company to deliver on its ambition of driving positive change and sustainability within the energy sector.

The management team and employees remain with GIGA Storage, now strengthened by the resources and capabilities offered by InfraVia’s hands-on team and network. Since the beginning of the partnership, GIGA has continued to professionalize and expand its team. Notable appointments include a Director of Construction, responsible for the realization of GIGA’s large pipeline of projects, and a new Chief Information Technology Officer, who will lead the further development of GIGA’s IT platform. Following the transaction, Rabo Investments exited its early-stage participation in the company after having supported its initial growth.

What is the impact of this deal on society?
This deal will significantly contribute to the broader Battery Energy Storage System (BESS) sector in the Netherlands, as GIGA Storage boasts the largest project pipeline in the Benelux region. As renewable energy generation continues to roll out at an accelerated pace, GIGA Storage is well-positioned to lead the development and deployment of large-scale BESS, which are essential for managing the increasingly congested Dutch grid.

This acquisition not only strengthens GIGA Storage’s capacity but also underscores the critical importance of BESS in achieving Dutch climate targets. BESS plays a vital role as an enabler of the decarbonization of the European power market, helping to ensure that renewable energy generation consistently contributes to Europe’s energy needs despite the inherently intermittent nature of these sources.

Utility-scale BESS is expected to grow at a rapid rate, marking the increasing need for capital and capabilities to successfully develop and manage this expanding capacity. The GIGA-Infravia deal paves the way for the rapid and effective deployment of large BESS assets, accelerating the energy transition through efficient capture and use of renewable energy while decreasing dependence on fossil-fueled power plants.

The flexibility provided by BESS creates significant opportunities within the energy market. Furthermore, this transaction validates the growing interest and potential in grid-scale energy storage solutions, encouraging future investments and supportive policies. Overall, GIGA Storage is poised to play a crucial role in driving the energy transition in the Netherlands and beyond.

What was most complex about this deal?
The GIGA-Infravia transaction is inherently complex due to the relative lack of maturity in the Battery Energy Storage System (BESS) sector. While specific details about the transaction cannot be disclosed, key considerations such as revenue profiles (merchant vs. contracted) and shareholder structures are typically critical in BESS deals.

Navigating this complexity required a careful balance of strong competitive dynamics in a highly dynamic and fast-moving environment.

The GIGA Storage team worked diligently to achieve significant milestones across numerous large-scale BESS developments while continuing to grow and professionalize as a pioneering company with ambitious sustainability goals. Given that BESS is a relatively new market in Europe, extensive education and support were necessary to illustrate the investment opportunities in battery storage to various investor groups and financing banks. The agility and determination of the GIGA team, along with the vision and resolve of InfraVia and its advisors, resulted in a landmark deal that positions both parties for growth. This partnership not only enhances GIGA Storage’s capabilities but also underscores the critical role of BESS in the energy transition, paving the way for future advancements in renewable energy storage solutions.