Miami’s I Squared acquires energy companies in the UK and Texas

I Squared, an independent global infrastructure investment manager, has announced dual acquisitions of energy companies: a controlling stake in the UK’s Aurora Utilities Limited, an IDNO platform in the UK, and Priority Power, which provides energy management services and infrastructure solutions in Texas, US.

The acquisitions were announced by I Squared in two separate releases on the same day, marking the Miami-based investment manager’s expansion on both sides of the Atlantic.

‘Last-mile’ British infrastructure

With the acquisition in the UK, I Squared will adopt, own and operate new electrical connections, known as ‘last-mile’ infrastructure, such as switchgear, transformers, circuit breakers and power cables to support new technologies.

Specifically, I Squared will invest $200 million into Aurora, which holds a license regulated by Ofgem to own and operate electricity distribution networks across the UK’s liberalised electricity market.

The Aurora platform aims to support customers by partnering to support the technical design and legal requirements of connection equipment, mitigating construction risk and adopting the assets once the infrastructure is completely built.

With the deal, I Squared aims to scale up the platform into a large owner of grid infrastructure, connecting customers to the electricity network to support the build out of EV charging stations, battery storage sites, commercial and industrial business electrification, as well as new residential housing developments.

Additionally, the company will receive long-term, index-linked, regulated revenues from energy suppliers who use Aurora’s assets to distribute electricity to their customers.

Have you read:
German smart meters company Solandeo acquired in rollout drive
US seeks to standardise acquisition of DER aggregation services

The announcement marks the second investment from I Squared’s Energy Transition Infrastructure Fund, which focuses solely on sustainable investments.

Commented Damian Darragh, fund partner, I Squared: “I Squared’s acquisition of Aurora signals our commitment to delivering the infrastructure required to enable electrification of the UK energy system. We are excited to build a platform to meet the growing electricity demands in the UK.”

Added Simon Reilly, CEO at Aurora: “IDNOs must play an increasingly key role in the electrification of transport, energy and heating systems to support UK decarbonisation across all sectors of the economy if we are to meet our net zero targets by 2050.

“I Squared’s backing is testament to this and with the team’s proven abilities to accelerate growth in innovative, sustainable businesses, I am confident that Aurora will go from strength-to-strength. We look forward to partnering with organizations who are as passionate about lowering emissions as we are.”

Texan Priority Power

In Texas, I Squared has entered an agreement to acquire Priority Power Management, an independent provider of energy management services and infrastructure solutions for commercial and industrial customers across more than 40 US states.

I Squared’s investment aims to allow Priority Power to expand its reach in the US and make additional investments in high-growth markets.

According to I Squared, they have signed a definitive agreement to acquire the company through its ISQ Global Infrastructure Fund III. I Squared is acquiring Priority Power from Ara Partners Group, LLC, Oaktree Capital Management, L.P. and other shareholders.

Specific financial terms have not been disclosed.

Commented Gautam Bhandari, chief investment officer and managing partner of I Squared Capital: “Priority Power has proven itself to be a valued partner for customers seeking to reduce costs, manage volatility and progress sustainability goals as they navigate the increasingly complex power market.

“As access to grid interconnections has become increasingly challenging, Priority Power has been leading the movement to build private transmission and distribution assets to support continued growth for its customers.”

“Priority Power has a compelling range of service offerings that are unique in the industry. We believe that with I Squared’s partnership and guidance, the company will accelerate both its internal and external growth plans in the coming years and play an important role in supporting growth, resiliency and sustainability in the power sector.”

According to I Squared, Priority Power helps businesses and institutions manage their energy costs and accelerate expansion plans by delivering solutions that marry data, market expertise, infrastructure and sustainability.

I Squared also cites Priority Power’s client-centric approach through a range of energy services, including energy procurement, risk management, interconnection services and renewable energy solutions.

Through its Infrastructure Services group, Priority Power addresses power availability constraints by designing and constructing private transmission and distribution assets.

Priority Power was founded in 2001.

Said Brandon Schwertner, CEO of Priority Power: “I Squared is one of the world’s most capable and respected infrastructure investors, partnering with them will position Priority Power to further accelerate our growth and deliver even greater value for our customers, shareholders and employees.

“We are grateful to our past investors for their commitment to our mission and their support in achieving this important milestone.”

Schwertner will continue as the Chief Executive Officer of the company and remain an equity holder.