Cinven will support Amara NZero to branch out beyond its focus on solar power, as evolving legal frameworks create more and more opportunities in green transition worldwide, partner Jorge Quemada told PE Hub Europe.
London-based private equity firm Cinven reached an agreement in late April to acquire a majority stake in Amara NZero, a B2B distributor of products and services used in the energy transition market, from ProA Capital.
Amara, headquartered in Madrid, offers a portfolio of products and services across renewables (solar, wind and hydro), electrification and energy transition services.
The legal frameworks around green transition as “constantly upgrading”, especially in Europe and in the US, fuelled by the need to set ambitious energy transition targets, said Quemada.
This global phenomenon creates strong growth in the segment, according to Quemada, and makes it an “attractive space for private equity to invest in”, said Quemada. For instance, the European Commission has adopted a set of proposals to make the EU’s climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55 percent by 2030.
While Cinven is very committed to ESG policies in all of its activities, said Quemada, Amara is its first investment in a company focused purely on green transition products and services. “But this will remain an area of focus,” Quemada added.
Amara is focused on solar, but the business is diversifying into other renewable energies. “We will support that going forward,” said Quemada.
Cinven has a track-record of investing in distribution companies. In 2019, the firm became a shareholder of Barentz, a global specialty ingredients distributor for the food, pharmaceutical, personal care and animal nutrition markets. In October 2022, Cinven entered into exclusive negotiations to acquire a majority stake in ETC Group, distributor for the telecom and technology infrastructure, from Carlyle. Paris-based ETC, now known as Netceed, recently acquired Amadys, a provider of passive equipment for the telecom, infrastructure and energy markets, from Equistone Partners Europe.
“We like the distribution space as it is well protected from inflation in this macroeconomic conjuncture,” Quemada explained.
“Amara is also a distributor, so this is a repeat play in terms of investing in companies that benefit from those distribution space dynamics,” he added.
Combination
Distribution companies are also a focus for Amara’s growth. It is looking at energy transition companies that “play in the distribution side of things” for M&A opportunities, according to Quemada.
Amara’s expansion will come via a combination of M&A and organic growth. “The company has done M&A in the past, and with us as a shareholder the focus on it will be even greater,” Quemada explained.
At present, Amara’s main geographies are Spain, Italy, Mexico and Brazil. One of Cinven’s key aims is to spread this existing footprint.
Cinven often looks to invest in European leaders and make them global leaders, said Quemada. With Amara, “there is an opportunity to do that”, he said.
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