ECI divests stake in Clarke Energy to Kohler

Kenny Wastell
02 February 2017

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ECI Partners has sold its stake in UK-based power generation equipment business Clarke Energy to US trade buyer Kohler.

According to various media reports, the deal values the business in the region of £300-350m, a range unquote" understands to be broadly accurate.

It is also understood ECI held a stake of around 30% in Clarke and has generated a return of more than 2x, taking into account the sale and dividends recouped during its investment.

Since ECI's initial investment in August 2012, the company has undertaken an international acquisitive growth strategy, bolting on businesses in Bangladesh, South Africa, Mozambique, Australia and the US.

During that period, Clarke has increased its turnover by 50%, according to a statement issued by the GP, and grown its headcount from 700 to 1,100.

The divestment marks ECI's eighth full exit since April 2014 from its ninth fund, which held a first and final close in 2008 on £430m. The vehicle retains seven investments following the sale of Clarke.

The GP made three exits in 2016, reaping 5.4x returns from the sale of Citation to HgCapital, 3.4x from the sale of Reed & Mackay to Inflexion and 3.1x from the sale of Rhubarb to Livingbridge.

Previous funding
ECI acquired a minority stake in Clarke in 2012, with the Clarke family retaining the remaining stake in the business.

Company
Founded in 1989 and headquartered in Knowsley, near Liverpool, Clarke manufactures and maintains power generation equipment. Its products are used in natural-gas-fuelled and biogas-fuelled combined heat and power facilities, as well as in the capturing of gases released from disused coal mines for use in power generation.

The company has a distribution network spanning 19 countries and generated a turnover of £230m in its most recent financial year with EBITDA of £25m, unquote" understands.

People
ECI Partners – John Hayhurst, Lewis Bantin (partners).
Clarke Energy – Jamie Clarke (CEO); Jim Clarke (founder, chairperson).

Advisers
Company – KPMG (corporate finance); DLA Piper (legal).
Vendor – PwC (financial due diligence); Roland Berger (commercial due diligence).