Encavis, KKR, Viessmann and ABACON enter into strategic partnership

On 14 March 2024, Encavis AG (Encavis) announced that the company has signed an Investment Agreement with Elbe BidCo AG, a holding company controlled by investment funds, vehicles and accounts advised and managed by Kohlberg Kravis Roberts & Co. L.P. and its affiliates (KKR) and that KKR has announced the launch of a voluntary public takeover offer to all Encavis shareholders. The aim is to enter into a strategic partnership to ensure long-term growth for Encavis. The family company Viessmann will invest as a co-investor in the KKR-led consortium. KKR will offer Encavis shareholders EUR 17.50 per share in cash and has already signed binding agreements with the major shareholder ABACON CAPITAL GmbH and other existing shareholders holding approximately 31 percent of the total share capital.

“With KKR and Viessmann, we aim to bring partners on board who share the same long-term and entrepreneurial approach and extensive experience of investing behind the energy transition.”

Dr. Christoph Husmann

Spokesman of the Management Board / CFO

Important documents on the voluntary public takeover offer

Press release

14.3.2024

Ad hoc release

14.3.2024

All information from the Bidder...

...including the Offer Document as soon as it has been published, can be found on the offer website:

Questions and Answers

On 14 March 2024, Encavis AG announced that the company has signed an Investment Agreement with Elbe BidCo AG, a holding company controlled by investment funds, vehicles and accounts advised and managed by Kohlberg Kravis Roberts & Co. L.P. and its affiliates (KKR). The aim is to enter into a strategic partnership to ensure long-term growth for Encavis. The family company Viessmann will invest as a co-investor in the KKR-led consortium.

In this context, KKR has announced that it will launch a voluntary public takeover offer for all outstanding shares of Encavis for EUR 17.50 per share in cash. KKR has already signed binding agreements with the major shareholder ABACON CAPITAL GmbH and other existing shareholders holding approximately 31 percent of the total share capital.

The signed Investment Agreement sets out the terms of the strategic partnership with the KKR-led consortium including Viessmann. Under the terms of the agreement, the KKR-led consortium supports Encavis' current growth strategy, including maintaining the existing management team, and acknowledging the dedicated workforce. Encavis’ registered office and headquarters in Hamburg as well as other locations shall be maintained. Furthermore, any debt of Encavis that is subject to change of control provisions is to be fully backstopped.

The Bidder will submit an offer document to the German Federal Financial Supervisory Authority ("BaFin") indue course and in accordance with applicable statutory German takeover law provisions, which will be published after review by BaFin. The offer document will then be made available on the offer website (www.elbe-offer.com). Upon publication of the offer document, the acceptance period will commence during which Encavis shareholders will have the opportunity to tender their shares.

The Management Board and Supervisory Board of Encavis will carefully review the offer document as soon as it is available. Subsequently, the Management Board and the Supervisory Board intend to recommend the acceptance of the offer to Encavis’ shareholders in a joint Reasoned Statement.

As soon as the Bidder has published the offer document and the acceptance period thus officially commences, Encavis shareholders will receive a notification from their respective custodian bank. On the offer website (www.elbe-offer.com) and in the notifications from the custodian banks, shareholders will be informed about the specific steps they need to take to tender their shares.

The offer price of EUR 17.50 per share in cash represents a premium of 54 percent to the XETRA closing share price of Encavis on 5 March 2024, the last undisturbed share price prior to the ad-hoc release of Encavis on 6 March 2024 that the company is in discussions with KKR, and 33 percent to the undisturbed three-month volume weighted average share price prior to 5 March 2024.

Ultimately, Encavis shareholders will have to decide for themselves whether they find the offer attractive, as this depends on several individual factors. The Management Board and the Supervisory Board intend to recommend the acceptance of the offer to Encavis’ shareholders in a joint Reasoned Statement.

Encavis anticipates that no (or if any only very few) holders of the hybrid convertible bond will exercise their conversion right, as the adjusted conversion price would be higher than the offer price. Until the end of the initial offer period of the tender offer, bondholders can notify the Company with a conditional conversion notice. Conversion will in such case become effective during the additional acceptance period. Conversion shares can then be tendered into the tender offer for the shares. Investors don’t have a put option for the bond, the issuer is allowed to redeem the bonds at par in case of a change of control. The Company will provide more detailed information to the bondholders separately.

The Management Board and the Supervisory Board of Encavis have approved the conclusion of the Investment Agreement on 14 March 2024 and expressly support the offer, subject to their review of the offer document by the Bidder as part of their fiduciary duties. The Management Board and the Supervisory Board intend to recommend the acceptance of the offer to Encavis’ shareholders in a joint Reasoned Statement.

Post-settlement, the intention is to delist Encavis from the stock exchange as soon as legally and practically possible after closing. This may impact remaining shareholders in their ability to sell their shares.

The final terms of the takeover offer will be set out in the offer document, which is subject to approval by the German Federal Financial Supervisory Authority (“BaFin”).

The offer document (once available) and other information in connection with the public takeover offer will be made available on the following website: www.elbe-offer.com. For further questions, please contact the Encavis IR department: ir@encavis.com

 

An intended indirect acquisition of a significant participation in an investment firm requires a notification to the German Federal Financial Supervisory Authority ("BaFin") in accordance with Section 24 (1) German Investment Firms Act ("WpIG"), which is followed by an ownership control proceeding (“Inhaberkontrollverfahren”).

The Encavis Group business unit Encavis Asset Management (“EAM”) includes Encavis Portfolio Management GmbH ("EPM"), which is licensed in Germany as an “investment firm” under the WpIG and subject to supervision by BaFin.

The planned acquisition of Encavis Group by the KKR-led consortium therefore triggers such a proceeding.

We are supporting the KKR-led consortium to receive regulatory owner control clearances. BaFin will assess, inter alia, whether the relevant acquirers meet the regulatory requirements for a reliable shareholder in an investment firm.

Further questions?

Please contact our IR department.

You can reach them by email at ir@encavis.com or by clicking on the button on the right.

Jörg Peters

Head of Corporate Communications & Investor Relations

Encavis

The Renewable Powerhouse

The Encavis AG is a producer of electricity from Renewable Energies listed on the MDAX. As one of the leading independent power producers (IPP), ENCAVIS acquires and operates (onshore) wind farms and solar parks in twelve European countries. The plants for sustainable energy production generate stable yields through guaranteed feed-in tariffs (FIT) or long-term power purchase agreements (PPA). The Encavis Group’s total generation capacity currently adds up to around 3.5 gigawatts (GW), of which around 2.2 GW belong to the Encavis AG, which corresponds to a total saving of around 0.8 million tonnes of CO2 per year stand-alone for the Encavis AG. In addition, the Group currently has around 1.2 GW of capacity under construction, of which around 830 MW are own assets.

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