Private equity firm Energy Capital Partners is set to buy nuclear commercial services company EnergySolutions in a deal that values the firm at $1.1 billion.
|Where it all began: EnergySolutions' LLW disposal facility at Clive, Utah (Image: EnergySolutions)
EnergySolutions CEO David Lockwood said the transaction, which has been unanimously approved by the company's board of directors, would give it the investment capital needed to grow its business. "As a private company with substantial financial backing, we will be able to better manage our business for the long-term in order to serve the best interests of our customers, employees, joint venture partners and other stakeholders," he said.
EnergySolutions can trace its roots to Utah low-level waste management company Envirocare, through a series of mergers and acquisitions grew into a self-proclaimed global leader in the recycling, processing and disposal of nuclear material. The company provides integrated services to the international nuclear industry as well as the governments of the USA and UK and medical and research facilities.
Current projects include decommissioning the Zion nuclear power plant in the USA, water treatment and decontamination at Fukushima Daiichi in Japan, as well as various cleanup, waste management and remediation work at US Department of Energy sites. The company is also, under contract to the UK Nuclear Decommissioning Authority, responsible for operations at the UK's Magnox sites. This includes electricity generation at the sole remaining operational Magnox plant at Wylfa as well as defueling and decommissioning at the other Magnox sites.
US-based Energy Capital Partners (ECP) has to date focused on investing in North American energy infrastructure, managing over $7 billion of capital commitments in non-nuclear power generation as well as transmission, midstream gas, renewable energy, oil field services and environmental services sectors. The acquisition of EnergySolutions sits with ECP's environmental stewardship activities. "In particular, we see a tremendous opportunity for the company to grow its decommissioning and disposal businesses in the USA, through strategic partnerships with large engineering and construction firms, expanding its services business with governmental agencies, and the rebidding of Magnox and other opportunities in Europe," ECP partner Tyler Reed noted. ECP plans to operate EnergySolutions as a standalone business operation, with the current management team remaining in place.
The acquisition is subject to regulatory approvals in the US and UK, as well as approval by EnergySolutions' shareholders. The $3.75 per share that EnergySolutions shareholders will receive under the agreement represents a premium of approximately 20% over the company's average closing share price as of 4 January, but the terms of the agreement give EnergySolutions until 6 February to solicit superior proposals.
Researched and written
by World Nuclear News