AIP Management makes offer for 3i’s Valorem stake

3i Infrastructure has received a binding offer for its 33% stake in Valorem, an independent European renewable energy developer and power producer, from funds managed by AIP Management and other co-investors.

Expected net proceeds are approximately €309m, 3i said, marking around a 15% uplift from its valuation of €268m at 31 March 2024, and a 31% increase from its September 2023 valuation, before the sale process was initiated.

Proceeds will be used to reduce the outstanding balance of the company’s revolving credit facility.

3i added that at the point of exit, the manager expects the 3i investment in Valorem to have generated a 21% gross annual internal rate of returns and approximately a 3.5x gross money multiple.

Since the manager’s initial investment in 2016, Valorem’s business model has been transformed from an asset developer to one of the leading independent renewable power producers in Europe. Valorem has also expanded its focus from French onshore wind generation to include solar and hydro generation across France, Finland, Greece and Poland.

Since 2016, Valorem’s operational asset base has grown to over 850MW, a more than five-fold increase, and its development pipeline has grown to 6.6GW, 3i added.

Scott Moseley and Bernardo Sottomayor, managing partners and co-heads of European Infrastructure, 3i Investments, said: “3iN’s strategy is focused on helping our portfolio of defensive businesses achieve strong growth as they leverage underlying structural drivers in their markets. Through this approach we are able to deliver long-term sustainable returns for our investors. 

“Valorem is a great example of this. Over the last eight years, we have worked closely with the team to support the company’s growth from a regional developer to an established leader in the European renewable power market. 

“We will always be disciplined in our approach to value realisation and balance sheet management. This divestment provides us with the opportunity to crystalise a significant uplift to the carrying value, the proceeds of which will be used to reduce our drawings on our revolving credit facility.”

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