Three Hills sells ACT stake to Bridgepoint in USD 1bn deal

Harriet Matthews
30 July 2021

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Three Hills Capital Partners has sold its minority stake in Netherlands-headquartered environmental commodities trading platform ACT to Bridgepoint in a deal that values the company at USD 1bn.

Bridgepoint has taken a minority stake in the business, acquiring the stakes previously held by Three Hills and its co-investors, according to a statement.

Three Hills invested EUR 60m in ACT in October 2018, acquiring a minority stake in the business. The GP invested alongside OPSEU Pension Trust (OpTrust).

Unquote sister publication Mergermarket reported in May 2021 that ACT was up for sale, with Morgan Stanley advising on the process. The company was to be marketed based on EBITDA of around EUR 60m.

During the investment period, ACT expanded its activities to France and Asia and developed its management structures.

The deal marks the first full exit from Three Hills Capital Partners III. The vehicle held a final close in January 2019 on its EUR 540m hard-cap. The fund aimed to deploy 80% of its capital in debt investments, with the remaining 20% dedicated to acquiring minority stakes. The fund aims to make 10-12 platform investments, deploying tickets of EUR 25m-80m.

The fund expects to make net IRR of at least 15% and generally expects to make at least 2x money on its deals.

The deal is Bridgepoint's first platform investment since completing its GBP 2.88bn listing on the London Stock Exchange, as reported.

Bridgepoint is deploying equity via its 2017-vintage EUR 5.7bn Bridgepoint Europe VI vehicle. The fund has a four-year investment period and invests EUR 125m-500m per deal, backing European mid-market companies with enterprise values of EUR 200m-1bn. The fund was 53% deployed as of June 2021, according to Unquote Data.

Company
Founded in 2009 and headquartered in Amsterdam, ACT is an environmental commodities trading platform that aims to provide market-based sustainability solutions and to help companies to hit their climate targets. ACT focuses on emission markets, renewables, energy efficiency, and biofuels and biotickets.

According to its latest publicly available accounts, the company posted revenues of EUR 486.1m in the financial year from 1 January 2019 to 31 March 2020. The company posts EBITDA of EUR 53m, De Telegraaf reported. Het Financieel Dagblad reported that ACT currently posts revenues of EUR 1.9bn, citing CFO Martijn van Laer.

ACT has offices in Amsterdam, New York, Shanghai and Paris. It currently has 280 staff and expects to grow its headcount to 300 in the next five years.

People
Three Hills Capital Partners – Leks de Boer (partner); Arjan Blok (investment manager); Victor Benazech (principal).
ACT - Bram Bastiaansen (co-founder, CEO).
Bridgepoint – Olivier van Riet Paap (head of Benelux).

Advisers
Vendor – Morgan Stanley (corporate finance); Clifford Chance (legal).
Equity – JP Morgan (corporate finance); De Brauw Blackstone Westbroek (legal).