Mergers & Acquisitions

Mergers & Acquisitions

Cheung Kong buys energy manager Ista for €4.5 billion, adding Germany to Li’s empire

PUBLISHED : Thursday, 27 July, 2017, 11:23pm
UPDATED : Thursday, 27 July, 2017, 11:23pm

Hong Kong tycoon Li Ka-shing, whose investments in Europe already span several countries, has added Germany to his corporate empire with the acquisition of Ista International, one of the world’s largest providers of energy management services.

Li’s Cheung Kong Property Holdings Ltd. (CKP) and CK Infrastructure Holdings Ltd (CKI) will form a venture to buy Ista for 4.5 billion euros (US$5.25 billion), according to a press statement. CKP will own 65 per cent of the venture while CKI owns the balance 35 per cent.

Ista, based in Essen in the Rhine-Ruhr region of Germany, runs the submetering business, measuring energy and water consumption and the cost allocation for properties. It also sells a range of meter hardware and provides a range of related services such as maintenance, meter reading, data processing and billing.

Bought by the private equity firm CVC Capital Partners in 2013 for 3.1 billion euros, Ista’s operations encompass Germany, Denmark, the Netherlands, France, Italy and Spain. Its business “has a stable and consistent growth track record, and generates steady recurrent cash flows,” according to the statement.

The acquisition is closely watched by bankers, ahead of a likely sale this autumn of Techem by Australian infrastructure investor Macquarie, Reuters said in a report this week. CVC had hoped to sell Ista for 5 billion euros, Reuters reported, citing people familiar with the matter.

In buying Ista, Li’s companies beat back rival bids by the Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan and Brookfield.

Ista reported 370 million euros in 2016 pretax earnings, and revenue of 850 million euros.