NIBC I&R advises Dalkia, PGGM on successful ELES acquisition

Corporate News -

Client
Dalkia is a subsidiary of Veolia Environnement and Electricité de France (EDF). Dalkia, a global leader in energy services, provides innovative solutions to support the sustainable growth of cities and businesses. In an era of climate change, volatile energy prices and scarce resources, Dalkia offers customers its expertise in developing, constructing and operating greener and more economical energy solutions. Dalkia operates within three key sectors being the provision of industrial utilities, building energy services and district heating and cooling. With almost 43,000 employees in 27 countries, Dalkia reported managed revenue of EUR 8.4 billion in 2013.

PGGM is a cooperative pension fund service provider and manages some EUR 167 billion in assets for a number of pension funds, including the second-largest pension fund in the Netherlands, PFZW. PGGM also provides services in the field of pension management, integral asset management and executive advice to pension funds, affiliated employers and their employees.

Case
Dalkia, already active in the Netherlands for over 30 years, primarily in the provision of utilities to the industrial sector and multi technical and energy performance and management services for buildings. The company, together with financial sponsor PGGM, was looking to expand its presence in the Dutch market, and a move into the growing district heating sector fitted perfect within the sustainable strategy and core competencies of Dalkia. The refocusing of activities of the Dutch energy company Essent, which is owned by German energy giant RWE, meant that the Essent-owned ELES (Essent Local Energy Solutions) business was quickly seen as a perfect fit for Dalkia’s ambitions on the district heating front. The acquisition of ELES would in one fell swoop make Dalkia - and PGGM - one of the largest district heating network operators in the country.

The Dalkia and PGGM consortium approached NIBC in early 2014 to arrange the financing of the acquisition.

Solution
NIBC acted as Mandated Lead Arranger for an 8-year financing package provided in conjunction with Rabobank and ABN Amro (with each bank providing a third of the financing) and comprising a term loan, a working capital and guarantee facility, and an interest rate hedge for NIBC’s share of the deal.

The deal was completed on 6 February 2014, making Dalkia and its financial partner PGGM the 3rd largest District Heating Network operator in The Netherlands. The ELES portfolio and assets include 64 heating networks spanning 1975 kilometers right across the Netherlands, along with a number of RWE Generation Nederland's medium-size units and services. The networks serve more than 62,800 households and 1,240 business customers. ELES posted revenues of EUR 135 million in 2012. The business will be jointly owned by PGGM (80%) and Dalkia (20%).

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