Renexia spa, a company active in the renewable energy sector headed by Toto Holding spa, closed a 265 million dollar deal with Apollo Global Management (see Toto’s press release here and Apollo’s here). The agreement provides for an investment in equity and convertible debt by Apollo Infrastructure of up to 265 million dollars in the US subsidiary of Renexia, US Wind Inc, to finance the development of existing projects and other interventions between 2020 and 2022. targeted development.
In the transaction, the Toto Group was assisted by the advisors: PJ Solomon and Natixis, as financial advisor; Bonelli Erede as legal counsel for the equity side, Orrick, Herrington & Sutcliffe, LLP and McDermott Will & Emery legal counsel for the bond issue, Saul Ewing Arnstein & Lehr as legal counsel in Maryland. The Apollo funds were advised, on the legal side, by Allen & Overy.
Born from the evolution of Toto Costruzioni Generali (a company that builds large complex road and railway infrastructures, born in the 1960s from the initiative of the brothers Ignazio, Antonio and Carlo Toto), the Toto Group is today a large and widely diversified entity, present in the motorway concessions, road and railway construction, renewable energy and engineering design markets. Toto Holding closed the 2019 consolidated financial statements with a production value of 378.3 million euros, net revenues of 266.7 millions, an ebitda of 60 millions and a net financial debt of 367.3 millions (source Leanus). The group had closed the 2018 financial statements with an ebitda of 240 million euros after a value of production of 507.9 millions, of which 188.6 millions in the energy sector, following the sale to the EDF Group, in December 2018, of the lease contract for the area covering approximately 743 sq km of federal waters off the coast of New Jersey (United States). This operation generated revenues for the Toto group of approximately 214 million dollars (net of accessory costs) which, at the exchange rate used for the conversion, amounted to over 181 million euros. Net revenues in 2018 were 287.3 millions and the ebitda, net of the transaction with EDF, was 15 millions with a net financial debt of 352 millions (source Leanus).
Since 2009 Renexia has been one of the leading companies of the Toto Group, which acquired it to enter the renewable energy market. The company is mainly active in wind and photovoltaic, but also thermodynamic and geothermal, as an EPC (Engineering, Procurement and Construction), able to follow each project in its entire life cycle. In 2014 Renexia entered the North American renewable energy market through its subsidiary US Wind Inc, which was involved in the construction and development of one of the largest offshore wind farms in the world, off the Atlantic coast.
For Renexia, the agreement with Apollo represents a further step in the path of consolidation of the position gained in the nascent offshore wind market in the United States since 2014, the year in which US Wind was awarded an over thirty-year concession for development of a wind farm (2 GW) in the federal waters off the State of Maryland. In 2016 US Wind therefore acquired a similar marine concession in New Jersey and, the following year, won the tender for the OREC incentive tariff launched by the State of Maryland. All this while continuing the development process of its offshore parks in parallel.
Riccardo Toto, chairman of US Wind and general manager of Renexia, said: “It is further confirmation that the entrepreneurial choices regarding the internalization and diversification of the business, with a strong focus on the green economy, pay off. In addition to the strategic and financial importance of the transaction, the confidence in the Group shown by an international investor of the caliber of Apollo is a clear message that we are moving in the right direction. The work carried out so far has allowed us an implicit valuation of the American activities of the Toto Group, to date, of over one billion dollars if we also consider the operation of last December 2018. Value which, as already recognized by important analysts, is it will multiply upon completion of the permitting and construction of our offshore parks ”.
Brad Fierstein, a principal at Apollo, commented, “We are delighted to partner with Riccardo and his US Wind team to advance this important project and meet the state of Maryland’s renewable energy goals. All this, moreover, creating hundreds of well-paid jobs and attracting significant investments in the Baltimore region ”.