Denmark's largest producer of biogas, Nature Energy A/S has been acquired by an investor consortium comprised of European private equity energy investment specialists Pioneer Point Partners, global investment firm Davidson Kempner Capital Management (DKCM), and Denmark's third largest pension fund Sampension.
Nature Energy A/S, the largest producer of biogas in Denmark, and the leading producer of green gas to grid in Europe from farm and food waste, was acquired March 14 by a consortium comprised of European private equity energy investment specialists Pioneer Point Partners, global investment firm Davidson Kempner Capital Management and a leading Danish pension fund Sampension.
Today is a significant day for our employees, customers and partners. The new ownership will help us to continue to enhance our production of green gas to grid at home and begin to grow our business beyond Denmark, said Ole Hvelplund, CEO of Nature Energy.
According to a statement, the privatisation of Nature Energy – a company founded by eight local Danish municipalities in 1979 as a natural gas distributor – marks a new growth era for the company, its management and employees and enables the company to leverage Denmark’s pioneering position in green gas to grid production by expanding internationally.
Nature Energy is a European leader in the emerging green gas to grid sector, and sits at the intersection of green energy production, the circular economy in waste management, and sustainable farming. Green gas injected into the European gas grid can be stored, which is critical to driving more renewable energy because it balances intermittent power sources such as wind and solar. Green gas also provides a direct path to green transport and heating using existing distribution infrastructure, said Sam Abboud, founding partner of Pioneer Point Partners.
With an enterprise value of DKK 1.1 billion (≈ EUR 147.7 million) and debt facilities available from the Danish government’s Green Investment Fund and local banks, the company is poised to grow from 5 operational plants up to 17 domestically, including two under construction, within the next 5-10 years.
Nature Energy contributes to Danish agricultural output and productivity by returning scarce resources to nature, supports the local economy including more than200 Danish farmers who directly or via cooperatives own a minority stake in the nearest Nature Energy plant, and help Denmark’s green energy transition and circular economy commitment by recycling farm and food waste, said Hasse Jørgensen, CEO of Sampension.
Management and the new owners intend to use the company’s strong capital base to accelerate growth of the existing green gas to grid plant pipeline and to develop new business activities in Europe and globally.
We firmly believe that Nature Energy is the perfect platform to build a European giant in the emerging sector of grid injected waste-derived green gas, following other innovative Danish renewable energy players such as Vestas and Ørsted (formerly DONG) that have gone global, said Sam Abboud.
Green transition can create jobs
The vision to develop and expand Nature Energy will be realised from Funen, Denmark, where Nature Energy will remain headquartered. As the company grows into an international centre of excellence in green gas to grid from farm and food waste, the investor consortium expects that both operations and local job numbers will increase. That ambition is supported by the Danish Ministry of Foreign Affairs:
We clearly see this as a high value impact investment for Denmark. This will not only boost Nature Energy’s potential to export green gas to grid technology and infrastructure abroad, but also create jobs and R&D at home, allowing Nature Energy to contribute significantly to the green transition and growth of the Danish economy, said Steen Hommel, Director of Invest in Denmark.
The consortium partners are experienced in developing and building European market leaders in energy and environment sectors – Pioneer has built renewable energy and recycling companies in the last 7 years in the UK, Spain and Italy, with a pending investment in Germany.
The sale of Nature Energy is part of a wider transformation of the Danish gas sector where the government has acquired the gas grid in order to realise an efficiency potential for the benefit of Danish gas consumers.
About NGF Denmark Holding
Nature Energy was established in 1979 under the name Naturgas Fyn (Natural Gas Funen – NGF) and has until now been owned by 8 local municipalities. At that time, the company’s task was to establish a gas grid on Funen. In 2012 a political agreement enabled the distribution of green gas into the Danish grid.
With more than 60 000 gas customers across Denmark and Europe, the company has five operational plants, two under advanced construction and a pipeline of new projects.
Furthermore, it has an agreement with Audi to replace natural gas in Audi’s gas-powered vehicles in Europe with biogas from Denmark. The Danish company NGF Denmark Holding will own Nature Energy and represents the consortium. The company will continue to be based in Odense, Funen. The investor consortium behind NGF Denmark Holding – Pioneer Point Partners is a UK-headed investment company that specialises in the energy and environmental sectors across Europe. The firm was established in 2008 by four partners who have deployed more than EUR 700 million of equity into 27 portfolio companies in 17 countries over the past two decades.
Sampension has assets under management of almost DKK 284 billion (≈ EUR 38.13 billion) and is Denmark’s third-largest pension provider. Sampension has 300 000 customers, whose combined annual pension contributions amount to more than DKK 9 billion (≈ EUR 1.2 billion).
US-headed Davidson Kempner Capital Management LP is an SEC-registered global investment firm with more than 30 years of experience and a focus on fundamental investing. DKCM and its affiliates currently have approximately US$30 billion in assets under management.