How can partnering with a well-connected and respected advisor improve changes of a successful transaction?
Powering Australian Renewables Fund (PowAR) planned to significantly grow their 900MW Australian portfolio while diversifying their renewable assets across the continent. Buying Tilt Renewables would do both. Indicatively valued at $3 billion, this renewables portfolio of eight operating assets and 11 developing projects would boost PowAR’s size and hand them assets like wind farms, solar farms and batteries.
Having already helped with their strategy, PowAR asked us to support them as market advisors in the bidding process. With 20-30 bidders, competition was steep and the fund would benefit from Baringa’s close relationships not just with the banks, crucial for getting the financing to buy, but also the seller, Tilt. Being trusted on all sides would allow us to act as an honest broker and give all parties confidence in the numbers.
Due diligence, clear expectations and realistic timeframes
Working directly with the CEO and his business development team, we provided due diligence on Tilt’s assets. Our bottom-up modelling, reporting and independent analysis fed into PowAR’s financial modelling and investment committee decisions, which underpinned their bid. Our team of market experts kept stress and tension to a minimum by setting clear expectations upfront about what we could deliver and by when. It was important to us that we were realistic about timeframes and avoided burn out, but we were also honest, responsive and easy to work with over a tough 6–8-week sprint.
Making moves and changing status
Together, we met their internal and external deadlines and PowAR formed a successful bid to takeover. Approximately a $3 billion acquisition, this energy transaction was by far the largest in Australia in 2021. Overnight, PowAR became Australia’s biggest Independent Power Producer (IPP), going from fund to fully functional business. The management team moved to Melbourne, and PowAR’s CEO became CEO of Tilt. Tilt was taken off the stock market, changing its risk profile and giving it more agility in the market over investment opportunities. With no external shareholders, ownership and management were better aligned, as were Tilt’s investment decisions and funding.