Swedish firm OX2 has made a move to expand its operations with a $3.9m acquisition of Australian renewable energy developer ESCO Pacific. The deal is set to be completed by the end of April 2023 and will bring significant potential for value creation through the sale of rights and the sale of turnkey solutions as construction begins.
ESCO Pacific, which is currently owned by Shell, has a portfolio of 1.4GW, including 1.2GW in solar and 200MW in energy storage. The company has several pre-early stage projects expected to be added to its development portfolio in 2023.
With the acquisition, OX2 aims to scale up operations by acquiring solar and energy storage projects while expanding onshore wind and exploring offshore wind and hydrogen schemes.
The agreement includes a consideration of up to A$17m, based on the fulfilment of sales and margin targets. Founder Steve Rademaker, who holds a 49% stake in ESCO Pacific along with private investors, will remain with the company for two years, initially in the role of managing director and then as an advisor to management. OX2 and Shell will continue their collaboration, including via power purchase agreements (PPA) offtake prospects.
ESCO Pacific’s acquisition is expected to contribute positively to OX2’s results next year and beyond. OX2 CEO Paul Stormoen said, “I am very happy to announce our entry into the Australian market, and to welcome an experienced local team to OX2. Through this transaction, we get an attractive development portfolio in a growing renewables market, while also significantly strengthening our capabilities within solar and energy storage. This gives us a solid foundation for profitable expansion in Australia.”
ESCO Pacific managing director and founder Steve Rademaker also said, “We have found a great buyer for ESCO Pacific. OX2 is a strong player with an excellent track record, and they will no doubt have the ability to significantly grow the footprint in Australia.”