Schroders strikes £358 million deal to take control of Scottish wind farm investor Greencoat

Asset management giant Schroders has struck a £358 million deal to take control of renewable investor Greencoat Capital.

The FTSE 100 firm saw its shares lift after it told shareholders it had reached an agreement to acquire a 75 per cent stake in Greencoat, which is one of Europe’s largest renewable infrastructure managers, with some £6.7 billion worth of assets under its management at the end of last month. It has a number of Scottish wind farm interests.

Schroders said it has a shared ambition to be a global leader in the green investment sector. It added that the deal will “significantly enhance” Greencoat's growth and offering to clients, as well as boosting its distribution reach and management experience.

Greencoat will become part of the group’s private markets division, Schroders Capital, and will be known as Schroders Greencoat.

Greencoat through the Greencoat UK Wind fund has interests in a number of Scottish wind farm assets.

Peter Harrison, group chief executive of Schroders, said: “We are pleased to welcome the Greencoat team to Schroders. Greencoat is a market-leading, high growth business, with an outstanding management team, which provides access to a large and fast-growing market in high demand among our clients.

“Its culture is an excellent fit with ours and Greencoat’s focus aligns very closely to our strategy, continuing our approach of adding capabilities in the most attractive growth segments we can provide to our clients.”

He added: “We have demonstrated our ability to integrate acquisitions successfully, to generate growth and create significant value for our shareholders. We are confident that we will be able to leverage the strengths of both firms while preserving Greencoat's differentiated position in the market.”

Richard Nourse, who founded Greencoat in 2009, said: “We are extremely proud of what the brilliant team at Greencoat has together achieved, creating a market-leading renewables asset management firm in the UK and Ireland, a strong platform in Europe and an important expansion into the US.

“Combining this team with Schroders’ global distribution network and expertise will enable clients to capitalise on the unequalled opportunity that our sector represents - a trillion dollar investable universe - and the chance to meaningfully support the global transition to net zero.”

Schroders has agreed to acquire the 75 per cent shareholding in Greencoat for an enterprise value of £358m.

The deal includes a potential earn out, payable three years after completion, which is subject to “stretch revenue targets”, the continued employment of the senior management team in the Greencoat business and is capped at £12m. The purchase price will be settled in cash.

A series of options, exercisable by Schroders or the Greencoat management shareholders, are in place for Schroders to acquire the remaining 25 per cent shareholding over time.

Schroders noted: “The business has a track record of delivering significant year on year growth, delivering compound AUM [assets under management] growth of over 48 per cent per annum over the last four years to 31 March 2021 with revenues growing by 36 per cent over the same period.

“Greencoat’s revenue and pre-tax profits for the 12 months to 31 March 2021 was £38.2m and £20m respectively.”

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