Bridgepoint adds $20bn infrastructure strategy, as ECP joins platform to build €57bn global alternatives asset manager

7 September 2023

  • Combined platform will strengthen position as one of the world’s leading private asset growth investors focused on the middle market, spanning private equity, infrastructure and credit with offices across Europe, North America and Asia.
  • Upfront enterprise value of £835 million, comprising 235 million of newly issued Bridgepoint shares, £233 million of cash, and £179 million of ECP’s existing debt.
  • Exceptional ECP leadership and investment team to continue running the ECP business, investing its funds independently under its current brand and delivering strong returns for the enlarged group by continuing the strategy responsible for ECP’s track record to date.

Bridgepoint Group plc (LSE: BPT) has taken a decisive step forward in becoming a more diversified alternative asset manager with the addition of Energy Capital Partners (ECP), a leading North American infrastructure investor with an over two-decade-long track record. ECP, which has raised over $30bn of capital since inception in 2005, including more recently in the fast-growing energy transition sector, has a market-leading position in the highly sought-after power generation, renewables, battery storage, environmental infrastructure and sustainability sectors. It operates across North America in an expanding subsegment of infrastructure investing which stands to be a key contributor to and beneficiary of the global decarbonisation effort with forecasted investment in the space expected to reach $1.9 trillion per annum through 2050, creating significant investment tailwinds and multiple potential growth avenues.

ECP and its highly experienced management team add a significant third pillar to the Bridgepoint business and accelerate Bridgepoint’s stated strategy of scaling through both product and geographic diversification. The distinct ECP infrastructure business will continue to operate under its existing brand and be led by its current management and investment team. The strategy will sit alongside Bridgepoint’s private equity and credit businesses and offer LPs more comprehensive immersion across the middle market. Doug Kimmelman, ECP’s Senior Partner and Founder, will continue to lead the infrastructure platform and ECP leadership will join Bridgepoint’s executive team bringing new sector, management and transaction experience to seek to drive further growth.

The transaction will be immediately accretive to Bridgepoint’s shareholders and continue to be accretive over time by diversifying and enhancing Bridgepoint’s earnings profile and profit margins.

The transaction will accelerate ECP and Bridgepoint’s respective growth ambitions in Europe and North America, building upon Bridgepoint’s 24-year history and ECP’s 18-year history and opening exciting new avenues for expansion given the complementary and largely non-overlapping investment strategies and geographic footprints. The combination will also provide opportunities to enhance both organisations’ current operations in different sectors of the credit market. The enlarged group will benefit from new collective strengths and synergies leveraging Bridgepoint’s deep European office network and connections which are likely to create further opportunities for ECP to grow its presence in Europe, capitalising on the continent’s energy transition. Equally, ECP’s well-recognised North American brand, extensive market knowledge and depth of relationships will benefit Bridgepoint.

Commenting on the transaction, William Jackson, Chairman, Bridgepoint said: “Joining forces with ECP is an important powerful next step in Bridgepoint’s strategic objective of building a globally-scaled, diversified platform in middle-market private assets investing. The transaction accelerates our scale, leadership and strategic development, enhances the quality of the Group’s earnings and margin profile, and provides greater diversification and earnings growth potential for shareholders.
We have a high bar for strategic M&A, and ECP is one of the few platforms we have identified which clearly surpasses it, both from a strategic and financial perspective.

As well as the compelling financial rationale for the transaction, Bridgepoint will benefit from the investing expertise of the ECP team, while, at the same time, there are significant opportunities for both of us to work together on initiatives such as adding adjacent strategies and expanding geographically.”

Doug Kimmelman, Senior Partner and Founder, ECP, said: “The opportunity to join forces with Bridgepoint is uniquely attractive. Our businesses are not only highly complementary – without any overlapping or conflicting investment strategies – but our firms importantly share a culture of collaboration, integrity and investment excellence making this a highly compelling opportunity for our investors and our employees alike.

We are very fortunate to have access now to a public equity currency to support our growth, while broadening the ownership of ECP across our firm, allowing us to continue attracting and retaining the very best team, especially in a period of heightened interest in the energy transition. All of us at ECP are excited about the combination and the support that this partnership will provide.

We look forward to working closely with the Bridgepoint team to further enhance our ability to serve our respective clients and grow our firm in a sustainable fashion well into the future.”

Raoul Hughes, Bridgepoint’s Group Managing Partner, said: “We have enjoyed interacting extensively with ECP over the last year as we have been jointly evaluating a transaction. We have found our cultures and approaches to business to be aligned and we are attracted to ECP’s leading infrastructure position across the rapidly expanding energy transition theme. Together we will offer more diverse revenue streams and greater growth opportunities with accelerating earnings expectations and a broader product mix to offer to our combined LP relationships. We expect ECP to continue on its successful growth path, with new and accelerated opportunities for growth, and the ECP team, under its continuing leadership under Doug and team, will bring an invaluable experience to the Group.”

The transaction, which is expected to close within four to six months, will be funded with units in a new limited partnership exchangeable for Bridgepoint shares and Bridgepoint’s existing balance sheet resources, and will see ECP’s senior management and many of its employees becoming significant shareholders in the company. A share ownership program will be instituted across ECP’s employee base and will be designed in a similar way to the existing structures established at Bridgepoint at the time of its IPO. As a result, ECP partners will collectively become one of Bridgepoint’s largest shareholders, holding 19% of Bridgepoint’s shares pre-earn out and up to 25% assuming full earn-out, ensuring strong alignment with the future success of the platform and in driving shareholder returns. Equity awards being made available to ECP employees will also incentivise future generations of ECP colleagues.

The historic growth of both firms has benefited from the minority investment positions from the funds managed by Blue Owl (formerly Dyal Capital Partners) and as part of this transaction, Blue Owl will convert its share of ECP fee related earnings into Bridgepoint equity, thereby remaining a shareholder in the enlarged group. Sumitomo Mitsui Trust Bank will retain its minority interest in ECP’s fee related earnings as the desire remains for both firms to partner in the important Japanese market.

J.P. Morgan Cazenove and Morgan Stanley served as lead financial advisors to Bridgepoint, and Simpson Thacher & Bartlett LLP served as legal counsel. Campbell Lutyens served as financial and strategic advisor and Bain & Co served as commercial advisor to Bridgepoint.

BofA Securities served as exclusive financial advisor to ECP, and Kirkland & Ellis served as legal counsel.

Source: Bridgepoint
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