Drax has agreed a £200m deal to acquire the battery storage investor Harmony Energy Income Trust (HEIT) as it looks to shore up the UK’s power supply.
The deal represents a premium of 11 per cent to HEIT’s closing price on 24 March, the last business day prior to the announcement.
Drax said the deal, which is conditional on approval from HEIT’s shareholders, represented a “highly attractive opportunity.”
“The Drax directors believe that adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed,” chief executive Will Gardiner said in a statement on Tuesday.
“In combination with our long duration storage, flexible generation, demand side response capabilities and renewable generation from biomass, we will be able to supply 4.5GW of dispatchable generation to meet demand.”
HEIT’s directors were advised by Panmure Liberum and intend to unanimously recommend shareholders vote in favour of the agreement.
Norman Crighton, non-executive chair of HEIT, said: “Since its launch in November 2021, HEIT has assembled a fully operational portfolio of eight 2-hour BESS projects totalling 790.8 MWh / 395.4 MV, which have attracted a strong level of interest through both our recent Asset Sale process and now through a potential bid from foresight and the recommended offer by Drax.
He added: “The HEIT Board believes that the acquisition will provide HEIT Shareholders with the opportunity to realise the value of their holdings, in cash, at an attractive value which is in excess of the reasonable medium-term prospects for HEIT on a standalone basis as a listed company.”
Drax is the UK’s largest power company. It employs more than 3,200 people across the UK, US, Canada and Japan.
The wider Drax Group reported revenue of £6.2bn in 2024, and adjusted pre-tax earnings (EBITDA) of £1.1bn.
