By Simon Jessop
LONDON (Reuters) – The climate investing strategy of private equity company TPG said it has agreed to buy a majority stake in British refrigerant gases firm A-Gas as tougher regulations push more users to capture and reuse the pollutants.
As part of the deal, TPG Rise Climate has formed a strategic partnership with fellow private equity company and current majority owner KKR, which will retain a “significant” minority stake.
Details about the financial terms of the deal and the specific stakes to be held by both investors were not disclosed, but sources familiar with the matter said it values A-Gas at just over 1 billion pounds ($1.27 billion).
The deal is expected to close by the end of 2023.
“Our investment in A-Gas is a thematic play on the increasing importance of establishing circular economies in critical industries,” Joerg Metzner, Business Unit Partner at TPG Rise Climate, said in a joint statement.
A-Gas supplies and recovers refrigerant gases for re-use or destruction that prevents them being released into the atmosphere and contributing to global warming at a scale “several thousand times higher” than carbon dioxide.
“A-Gas will play a leading role towards a more sustainable and circular refrigerant gas value chain globally as demand for refrigerants continues to grow and regulatory scrutiny and enforcement increase,” Metzner said.
Over the course of 2022, the company’s technology helped to abate around 8 million metric tonnes of carbon dioxide, equivalent to taking 1.6 million cars off the road.
Since KKR invested through its KKR European Fund IV in 2017, A-Gas has, on average, grown revenue by 14% a year and earnings before interest, tax, depreciation and amortisation by 18% a year, it said.
Citi advised TPG over the deal, while Goldman Sachs advised A-Gas and KKR.
($1 = 0.7851 pounds)
(Reporting by Simon Jessop; editing by Barbara Lewis)
