SINGAPORE (May 31): Sembcorp Industries is acquiring UK Power Reserve (UKPR) for £216 million ($385 million).

UKPR is UK’s largest flexible distributed energy generator. It owns and operates a portfolio of highly flexible distributed energy generation projects across 32 locations in England and Wales, with 533MW in operation and a further 480MW in construction and under development.

This combined portfolio of over 1,000MW comprises small-scale, fast-ramping power generation assets and rapid response batteries.

Connected at the distribution level close to customer load, UKPR’s assets require less investment in large power infrastructure, and are more economical to develop and operate, says Sembcorp.

Under the acquisition deal, Sembcorp, through a 100%-owned entity, will acquire 100% of UKPR’s holding company, Repono Holdco, from private equity investors Inflexion and Equistone, which hold a 42.5% stake each, as well as the rest of the 15% stake from the members of UKPR management.

Sembcorp says the acquisition is expected to be completed by the end of this week. Following the completion of the acquisition, Sembcorp will consolidate all assets and liabilities of UKPR, including its net debt.

Sembcorp says the consideration for the deal was determined taking into account discounted cash flows and relevant transaction multiples, and will be settled in cash.

The group intends to fund this acquisition through a mix of internal cash resources and external borrowings.

Neil McGregor, group president & CEO of Sembcorp, says, “Markets, customers and stakeholders are looking for 21st century energy solutions that are more sustainable, flexible and competitive. Our belief is that we can achieve this by transforming our business model to provide a full spectrum of energy solutions with the right mix of capabilities and technologies.”

“This acquisition gives Sembcorp strong capabilities in the new growth niche of flexible distributed generation and energy storage, in line with our goal of being a future-ready business that is poised to benefit from the global energy transition. It will also build up Sembcorp’s merchant energy business, which we have identified as an area of focus for the group,” adds McGregor.

As at 12.32pm, shares in Sembcorp are trading 1 cent higher at $2.95.