London-based acquisition vehicle Horizon has made its first purchase since its listing on the London stock exchange in February 2010.
London-based acquisition vehicle Horizon has made its first purchase since its listing on the London stock exchange in February 2010.
Florida-based temporary power providers APR Energy is to be reversed into cash shell Horizon in an $855 million (£527 million) deal.
The purchase has been led by co-founder of Pizza Express, Hugh Osmond, who in February 2010, outlined Horizon’s acquisition rationale.
‘Today there are fundamentally good companies which have fundamentally poor capital structures, because of the weight of their debt,’ says Osmond.
‘For them, refinancings are expensive Elastoplast. The need is to restructure their balance sheets and support management and investment for growth. This need is urgent, and it is Horizon’s aim to undertake just this with the business we acquire.’
The acquisition is payable in $395 million cash and $495 million in Horizon shares. Trading in Horizon shares will be suspended immediately and renamed APR Energy on its re-admission to the London Stock Exchange.
Mike Fairey, chairman of Horizon, comments: ‘The acquisition is at an attractive price relative to its quoted peer, the injection of our cash accelerates APR Energy’s ability to grow, and its stock listing will enhance its reputation and provide further access to growth capital if required.’
Fairey adds that the acquisition of APR Energy has come after a review of an ‘increasing number of potential investments’.
Horizon says its purpose is to identify, acquire and restructure a single major business or company, significantly reduce its debt burden and then deploy said company’s existing expertise and newly freed up capital to help drive profitable growth.
According to a statement the remaining $275 million left on the balance sheet is to be used to accelerate APR Energy growth.
APR Energy was founded through the buy out of Alstom’s power rental business in 2004. The business employs 500 people in 10 countries. It had reported revenues of $126 million in 2010.
Chief executive officer and founder of APR Energy, John Campion says that in emerging markets there is a significant and widening deficit of power that is holding back economic growth and living standards.
Campion explains: ‘This transaction with Horizon accelerates our ability to address this growing market opportunity with immediate capital to fuel growth and long term access to capital markets that truly understand our business.’
Re-admission to the London Stock Exchange is expected by Horizon to occur by the end of September 2011.
