A â‚¬127.5 million bid to buy the SWS Group has been placed by Irish-owned Imera Power Limited (IPL), which plans to invest a further â‚¬280m developing SWS’ wind energy business.
Imera’s bid could be upped if Bandon-based SWS agree to enter into exclusive sale talks.
As Imera’s bid tops the â‚¬100m price tag placed on the business by Ion Equity, other interested parties will now have to increase their offers significantly to be in with a chance of winning the ongoing bidding war to buy the business.
The Irish Examiner understands Imera has no interest in the business process outsourcing (BPO) element of SWS, which is a significant employer in West Cork. Imera has reached a deal with a “large third party services company” which will acquire the BPO business if Imera buys SWS. The BPO section provides accounts back-up and other supports to government departments and companies like Independent News and Media.
Imera, led by former Bord GÃ¡is executive Rory O’Neill, is engaged in the â‚¬350m development of twin electricity interconnectors between Ireland and Britain to provide a 700mw connection by 2010, phase one of 350mw by 2008. Irish Government policy envisages 500mw connections by 2012 to help secure the State’s energy needs.
Imera is planning a stock market floatation through an initial public offering (IPO) and London AIM listing by the second quarter of 2007. The acquisition of SWS would greatly enhance Imera’s attraction at the IPO stage.
Amazingly, Imera and the other interested bidders have yet to be given access to a “data room” by SWS to enable them to fine tune their bids in advance of the December 22 deadline set by SWS for the completion of the sale.
The bid-offer document submitted by Imera to Merrion Capital, which has been charged by SWS with the sale of the business, states: “IPL has based this bid value on data accessed through the public domain and has not yet obtained information via the data-room process. IPL reserves the right to fine-tune its bid later in the process subsequent to the review of such further information.”
The Imera offer which been seen by the Irish Examiner comes with a number of conditions, including:
Final due diligence being conducted, particularly on technical systems, “audited management accounts for the year 31/12/2005 latest balance sheet”, 2006 Budget, “forecast business plan and a statement of tax position”.
Clarification on pipeline of future wind farm developments.
Agreement on transitional service arrangements with respect to IT, billing, accounting and customer relationship management.
The Irish Examiner understands that Imera plans to utilise its electricity interconnector to sell off-peak wind-generated power in Ireland to the British market. At present there is practically no market for off-peak wind power in Ireland and Imera’s plans will give all Irish wind farms access to the lucrative British market, where green energy is sold at a significant premium to the Irish market.
Imera, backed by multi-billion dollar US energy funds, regards the acquisition of SWS as a key development and plans to use SWS’ wind-energy expertise to develop and acquire other Irish and European wind operations.
Imera also has plans for 400MW Gas Fired CCGT (combined cycle gas turbine) electricity power plant in Wales where it is at the site acquisition stage.
The company also wants to build a larger energy business to compete with the ESB and Bord GÃ¡is. They are also considering an entry in the electricity trading market in Ireland.
By Conor Keane
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