Equatorial Energia is very close to the largest purchase of renewable energy ever made in the domestic market. The company bought Echoenergia, which was already in its second sale attempt, for R$ 6,7 billion

Equatorial Energia is about to sign the purchase of Echoenergia, in the largest purchase of renewable energy ever made in the domestic market. The company, which performs transmission and distribution, will pay the amount of R$ 6,7 billion, without the exchange of shares. The purchase marks the debut of Equatorial, already in an impactful way, in generation, adding renewable assets, which has attracted the attention of investors. Echoenergia has one of the largest wind energy portfolios in the country.

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Echoenergia and its sales attempts

Actis, a private equity manager, had already tried to sell Echoenergia in 2019, when it had closed an exclusivity agreement with the Canadian CDPQ, however, they did not reach a price agreement until the pandemic suspended ongoing negotiations. In June of this year, the manager reactivated the Echoenergia sale process, coordinated by Credit Suisse.

Other companies, such as Eneva, came to evaluate the business this second time, until Equatorial got exclusivity. The buyer was advised by XP Investimentos, which puts the house in the top league of investment banks in M&A.

It is worth mentioning that XP has continued with equity and debt offerings in recent years, with large operations included, but its entry into acquisition and merger transactions has been mainly in deals of medium and small size.

The market estimate was already of a value very close to R$ 7 billion for the renewable energy company, but that would include debt, however, it would only be the equity part. The enterprise value reaches the mark of R$ 10 billion.

Renewable energy purchases grow in Brazil

With the high global demand from investors for sustainable practices, transactions in renewable energy have grown in Brazil. About 10 days ago, CPPIB, from Canada, and Votorantim Energia decided to unite their operations in the sector, which are valued at more than R$ 8 billion. they were already partners.

In the proposal, they also intend to include CESP, which could increase the value of the business to something around R$ 17 billion. The manager Actis has been updating its portfolio in Brazil and has gone through a kind of recent business reorganization.

The manager will continue its activities in Brazil with a focus on renewable energy assets, while its contributions in areas such as education and consumption will be managed by Noon.

Get to know Equatorial

Equatorial Energia is a holding company that operates in the energy sector for Brazilians, in the sectors of distribution through the states of Maranhão, Pará, Piauí, Alagoas and Ceará. Transmission, with 8 projects already concluded and an operational line that crosses Goiás and Tocantins.

In addition, the company also uses thermoelectric generation, through Distributed Generation and Geramar. The company was established in 1999 and since then has built a history full of milestones. The last was the acquisition of E-Nova.