FTSE 250 investment trust 3i Infrastructure is poised to sell its stake in French independent green energy operator Valorem in a deal worth around €309m (£258m).
The trust said on Monday that it had received a binding offer for its roughly 33 per cent stake in Valorem from Danish investment manager AIP Management and other co-investors.
3i Infrastructure said it expected the transaction to complete in the first quarter of 2025, subject to it consulting with employee groups at Valorem, accepting the offer and regulatory approval.
The trust expects the stake to generate around €309m (£258m) in net proceeds, which would be a roughly 15 per cent uplift from its €268m (£224m) valuation as of 31 March 2024.
This figure would also mark a 31 per cent uplift from the valuation on 30 September 2023.
3i Infrastructure said the proceeds would be used to pay down debt from its revolving credit facility.
The firm said its investment in Valorem is expected to have generated a gross annual internal rate of return of around 21 per cent and a roughly 3.5 times gross money multiple on its original investment.
3i Infrastructure first invested in Valorem in 2016. Since then, it has helped the French company grow its operational asset base more than five times over and quadruple earnings before interest taxes, depreciation and amortisation (EBITDA).
“Over the last eight years, we have worked closely with the team to support the company’s growth from a regional developer to an established leader in the European renewable power market,” Scott Moseley and Bernardo Sottomayor, co-heads of European infrastructure at 3i Investments, said in a joint statement.
“We will always be disciplined in our approach to value realisation and balance sheet management. This divestment provides us with the opportunity to crystalise a significant uplift to the carrying value, the proceeds of which will be used to reduce our drawings on our revolving credit facility.”