OX2 inks USD 84m deal to buy renewables developer ESCO Pacific

Swedish renewables developer OX2 AB (STO:OX2) on Friday said that it is setting foot in Australia through a AUD-126-million (USD 84.3m/EUR 77.4m) deal to acquire ESCO Pacific, a local peer with a project development portfolio of 1.42 GW.

“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,” OX2’s chief executive Paul Stormoen said

Established in 2015, ESCO Pacific has a development portfolio comprising 1.22 GW of solar and 200 MW of energy storage projects. The company, which employs 21 people, has so far taken to construction more than 800 MW in projects. Its pipeline included the Ross River, Childers and Susan River solar farms, among others.

OX2 has committed to further developing the ESCO Pacific business by expanding its product offering to the sale of turnkey solutions at construction start, as well as adding onshore wind to the company’s portfolio while also exploring offshore wind and hydrogen initiatives.

The Australian firm is currently owned by UK oil and gas major Shell Plc (LON:SHEL), founder Steve Rademaker and private investors. OX2 and Shell have agreed to continue collaborating in the future, including through PPA offtake opportunities.

The agreed purchase price is on a debt-free basis. The transaction terms also provide for a contingent consideration of up to AUD 17 million subject to the achievement of certain sales and margin targets.

The acquisition hinges on the fulfilment of certain conditions and is set to close by the end of April.

(AUD 1 = USD 0.669/EUR 0.615)

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