On 28 July 2023, Encavis' 25th anniversary on the stock exchange was celebrated at the Frankfurt trading floor of Deutsche Börse. The stock market presence of the Hamburg-based company, which was founded in 2001 as Capital Stage AG through the contribution of Futura Capitalis' investments to HWAG Hanseatisches Wertpapierhandelshaus AG, which has been listed on the stock exchange since 1998, is now history. At the end of January, the wind and solar park operator, which was last valued at around 2.8 billion euros, ceased trading on the regulated market of the Frankfurt Stock Exchange and the Hamburg Stock Exchange.

One of the largest of more than 20 delistings in Germany since the beginning of 2024 is – like many others – the result of a takeover. On 14 March last year, US private equity firm KKR announced its intention to submit an offer for Encavis at 7.50 euros per share, in a consortium with the North Hessian family-owned company Viessmann.

The „Elbe BidCo“ had already agreed with Abacon Capital, the investment company of the family office of the Hamburg billionaire family Büll, and other Encavis shareholders with a total stake of around 31% that they would remain invested in the company in the long term. At the same time, the consortium signalled its unreserved support for the Management Board's current growth strategy, and its intention to retain the existing management team, jobs, the company headquarters in Hamburg and other locations.

Based on the investor agreement and the offer price, which provided for a premium of 54% on the Xetra closing price of the then MDax company immediately before the talks about a possible transaction became known on 6 March 2024, the Management Board and Supervisory Board of Encavis also announced their intention to recommend acceptance of the offer at an early stage. KKR and Viessmann have now received the Börsen-Zeitung Corporate Finance Award in the Mid & Small Caps category for what was a very well prepared transaction.

„For us,“ says Encavis CEO and CFO Christoph Husmann to Börsen-Zeitung in retrospect, „the time was right to open a new chapter in the company's history – with strong partners at our side who share our vision and want to achieve further growth together with us.“ He was not surprised by the takeover bid. On the one hand, the business model of the company, which is one of the leading independent power producers from renewable energy in Europe, is „extremely solid, low-risk and extremely successful“. On the other hand, the Encavis share had come under pressure due to the falling share prices of competitors.

Husmann points to high financing costs, the low electricity price level, negative prices and supply chain problems, which Encavis, like other companies in the sector, had also experienced in the past year. Revenue and earnings fell significantly in 2024. „We are delighted that KKR and Viessmann are providing Encavis with the necessary long-term financing with their strategic investment at a crucial time for us and are supporting us as strategic partners", he says. According to the Chief Executive Officer and Chief Financial Officer, this will enable the company to utilise additional opportunities and consolidate its strengths in the clean energy sector. „At the same time, we are also helping to promote a more energy-independent Europe with this investment.“

Before the offer from KKR and Viessmann, Encavis was primarily reliant on financing the equity portion for the acquisition of new parks from the previous year's profits, current cash flow and loans taken out at the AG level. „However, these funds were limited,“ explains Husmann. For this reason, the company has deliberately refrained from paying a dividend since 2023 with the consent of the majority of investors and shareholders. „Instead, we have used the money to buy more parks and accelerate our growth.“ The takeover will provide Encavis with the financial resources it needs when it needs them in future.

Husmann will relinquish his duties following the company's Annual General Meeting in June 2025 and the completion of the squeeze-out of the remaining minority shareholders. The consortium held 94.15% of the shares when the delisting tender offer was submitted to Encavis shareholders on 18 February.

The company is excellently positioned for its ambitious growth targets, says Mario Schirru, Chief Operating Officer (COO) and Chief Investment Officer (CIO) of Encavis. In the core markets of Germany, Italy, Denmark, the Netherlands and Spain, the company is constantly reviewing acquisition projects in the wind and solar sectors and is also increasingly involved in the battery business. „We want to grow profitably and therefore only acquire those projects that best meet our high standards.“

Schirru, who is to become CEO of Encavis after the June AGM, emphasises the company's functioning business model. „However, one of our strengths over the last ten years has always been our ability to adapt quickly to changing market conditions,“ he says. The company is open to necessary changes. For example, Encavis is getting involved in projects earlier, has recently acquired more wind projects that are already connected to the grid or are about to be commissioned, and is increasingly active in the battery business. The company also wants to develop further in electricity marketing.

Mergers are not in sight for the time being. „A merger is not currently planned and does not make sense from today's perspective,“ says Schirru, who also adds that major strategic decisions always depend on how the markets develop.

The COO and CIO, who have been in office since August 2022, emphasise the long-term perspective of the owners KKR, Viessmann and Abacon. „KKR and Viessmann have extensive experience and expertise in global infrastructure investments, particularly in the energy sector, as well as a proven track record in long-term corporate investments and pursue the same investment approach.“ Both are investing in the future of renewable energies and are convinced of Encavis' great potential. At the same time, the existing shareholders around Abacon will remain involved to further support long-term growth. „In concrete terms, this means that we are also looking far into the future internally with all departments,“ says Schirru. „As a first step, we are planning the next ten years of Encavis AG.“

Distributions to the new owners are reportedly not on the agenda for the time being. „At the moment, the focus is clearly on organising the transition from a listed to a private company as professionally as possible and concentrating on the ambitious growth targets,“ says Schirru. That is why a lot is being invested in high-quality wind, solar and battery projects and in additional staff.

According to the Italian, who was born in Rome, Encavis is currently looking for 13 more employees, „and the trend is rising“. At the end of 2023, the company had a total of almost 400 employees.

The management welcomes the fact that the takeover of Encavis was accompanied by a withdrawal from the stock exchange. „The main advantage is that we as a company can plan for the long term and act more flexibly if we no longer have to align our actions primarily with the expectations of capital market players,“ explains Husmann.

As a private company, there are far fewer of the obligations, requirements and costs that are associated with being listed on the stock exchange. These include the publication of financial reports, other reporting obligations and the requirements of the financial supervisory authority BaFin. „In addition,“ Husmann continues, „we no longer spend several months a year travelling with the Management Board and Investor Relations team to roadshows and investor conferences in Europe or the USA, which saves management resources and travel costs.“

The Management Board does not foresee a return of Encavis to the stock market at present. Any responsible management must keep this strategic option in mind, says future CEO Schirru. „However, as we have just left the stock exchange and therefore have many advantages, there is no reason to do so in our case.“ Raising equity capital, a key motivation for a stock market listing, is no longer an issue for Encavis.