NDBIB Advises Sunshine Energy on Hydropower Asset Sale
NDB Investment Bank (NDBIB) continued to lead and facilitate strategic Mergers and Acquisition (M&A) transactions in Sri Lanka this year as well with the recently concluded divestiture of the hydropower assets of Sunshine Energy (Private) Limited (SEL) to Aitken Spence PLC. NDBIB acted as the exclusive sell side advisor to the divesting shareholders of Waltrim Energy Limited (WEL) which included Sunshine Energy, the renewable energy arm of Sunshine Holdings PLC and its co-investors.
DarshanPerera, CEO of NDBIB, stated, “Our focus when in it comes to M&A is to make sure our clients receive best-in-class financial advisory services to achieve their strategic goals. This facilitates our clients to grow, reorient themselves and consolidate their business operations to better create shareholder value.” WEL consists of three mini hydropower plants with a total installed capacity of 6.6 MW and was transacted at an enterprise value of LKR 1.5 billion.
NDBIB executed the transaction via a multi-staged process carefully designed to establish the objectives and sensitivities of divesting shareholders and ensure focused efforts in investor screening. NDBIB carried out pre-transaction preparation including business due diligence, financial forecasting and valuations, and was able to garner healthy interest from both local and foreign investors covering both strategic and financial sponsors.
NDBIB’s Chief Corporate Advisory Officer, Nilendra Weerasinghe said, “We see significant levels of activity in the M&A space with the low interest rate environment boosting asset valuations. Renewable energy and agriculture have emerged as top two areas attracting M&A interest and we hope to close many more transactions soon.”
NDBIB coordinated and assisted SEL in facilitating the legal, financial and tax due diligence carried out by Aitken Spence and other shortlisted investors despite interruptions from COVID-19 related lockdowns that prevailed during the execution of the transaction. NDBIB also played the lead role in negotiations with Aitken Spence and other shortlisted investors to arrive at the most favourable terms for SEL in order to successfully close the transaction.
Sunshine Holdings PLC has grown to become one of Sri Lanka’s most respected conglomerates with interests in healthcare, consumer goods, agribusiness and renewable energy. The divestiture enabled SEL to restructure its renewable energy portfolio, allowing the company to monetise its hydropower investments for the purpose of redeploying into other forms of renewable energy to create value to its shareholders.
This transaction comes hot on the heels of Sunshine Holdings’ acquisition of Daintee Limited, a market leader in the confectionery space, enhancing its footprint in the consumer sector. NDBIB acted as the exclusive financial advisors to the divesting shareholders of Daintee Limited. Aitken Spence emerged as the successful bidder in a highly competitive M&A process, particularly given its strategic fit and existing presence in the renewable energy space, with the acquisition diversifying its energy sector portfolio.