PARIS: VINCI has announced the signing of an agreement to acquire ACS’s energy business. The transaction price is based on an enterprise value of €4.2 billion.

The transaction price is based on an enterprise value of €4.2 billion. It leads to an estimated purchase price at closing of c. €4.9 billion, assuming a closing at year-end 2021 and after taking into account around €0.7 billion of net cash items, working capital and other adjustments. In addition, ACS would receive additional payments of €40 million for each ready-to-build GW developed by the Company over a period of maximum 8.5 years after closing, up to 15 GW – i.e., a cumulative maximum contingent payment over time of €600 million.

The acquisition will be financed through VINCI’s available cash and credit lines. It will not have a significant impact on VINCI’s balance sheet strength. The earnings per share accretion is expected to be mid- to high-single-digit, from the first year after closing.

Moreover, VINCI and ACS also intend to build a partnership through the setting up of a joint venture, with the right to acquire at market terms ‘mature renewables assets’, i.e. fully developed, built and connected to the grid by the Company in the future. This JV⁵ would be 51%-owned and fully consolidated by VINCI.

The acquisition is subject to customary regulatory approvals, including merger control, and is anticipated to close around the end of year 2021.

The scope of the acquisition consists in:

• most of the ACS Industrial Services’ contracting business. With a workforce of around 45,000 employees in c. 50 countries, it offers a breadth of support services – spanning network, specialized facilities, control systems – as well as an integrated offer to realize EPC projects, mainly for the energy sector. It is a global powerhouse with footprint in Spain, Mexico, Brazil, Peru and Chile. Over the past 3 years, its average revenues were above €6 billion with EBIT margin of 6+% on average;
• eight greenfield concessions⁴ projects under development and/or construction, mainly in the electrical transmission field;
• ACS’s renewables development platform. This platform has a long and recognized track-record of developing renewables concessions projects, with notably 4.4 GW developed over the past three years. VINCI and the Company have identified new opportunities for the short and medium term, of c.15 GW, mainly in solar PV and onshore wind, as well as c.8 GW of upcoming offshore wind projects.

The transaction is consistent with VINCI’s strategy to build a global player in energy contracting, to develop a platform for renewables projects, to broaden the portfolio of concessions and extend its average maturity:

• The Company has activities and a geographic presence that are complementary with VINCI’s. It has a long track-record in complex energy EPC projects, with a longstanding footprint in Spain and Latin America;
• VINCI‘s contracting/concession/O&M business model, combined with the Company’s projects development platform should enable VINCI to become a major player in the renewables field;
• VINCI’s balance sheet strength will give the Company additional financial flexibility to develop, build and manage renewables assets;
• The Company will enhance VINCI’s contribution to the climate transition.

Xavier Huillard, Chairman and CEO of VINCI, commented: “This acquisition is a unique opportunity for VINCI to create a global player in energy contracting and to develop renewables projects, remarkably fitting its strategy. The Group is delighted to welcome an outstanding management team and a skilled workforce of around 45,000 people. Synergies derived from complementary geographies, technical expertise and integrated business model, will be a significant asset to win new projects and to seize greenfield renewables energy opportunities. We will capitalize on ACS IS recognized track record to enhance VINCI’s contribution to the climate transition and pursue our environmental ambition together”.

VINCI is a global player in concessions and construction, employing more than 217,000 people in some 100 countries. www.vinci.com