Multinational energy company TotalEnergies is bolstering its portfolio in a major way, agreeing to acquire VSB Group, a Germany-based European renewable energy platform, for €1.57 billion ($1.65B).
Swiss asset manager Partners Group, one of the largest firms in the global private markets industry, acquired a majority stake in VSB in 2020 and its EBITDA has increased five-fold since then. Under Partners Group, VSB more than doubled its project pipeline from around 8 gigawatts (GW) to more than 18 GW and increased its under-construction capacity from 53 megawatts (MW) to more than 475 MW today.
VSB was founded in 1996 and operates throughout the renewable energy value chain, developing, building, owning, and managing projects and e-mobility solutions while also providing technical and commercial management services for third-party assets. VSB has developed more than 2.3 GW of assets to date and manages more than 3 GW. Its projects include wind, solar, battery energy storage, and charging solutions. Headquartered in Germany, VSB is also active in France, Poland, Italy, Croatia, and Finland, employing more than 500 people across 21 branches.
“VSB is a highly thematic investment,” explained David Daum of Partners Group. “Through our deep research capabilities, we identified VSB as uniquely positioned to benefit from decarbonization tailwinds in Europe, tracking the Company long before investing. We then transformed VSB from a developer into a full-service renewable energy platform and independent power producer. Having completed our value creation plan, we believe now is the right time to exit.”
The transaction will strengthen TotalEnergies’ value chain in Germany, which represents half of VSB’s portfolio. It complements the recent acquisitions of battery storage developer Kyon Energy and energy manager Quadra Energy, as well as TotalEnergies’ major offshore wind positions in northern Germany.
Partners Group’s Infrastructure business has more than $26B in assets under management globally. The firm touts around $150B in overall assets under management. Partners Group was advised by Nomura Greentech as its exclusive financial advisor and A&O Shearman as its legal advisor in this transaction.
Meanwhile, down in Texas…
TotalEnergies also announced a deal involving some of its recently commissioned projects in the United States. The company has agreed to terms with funds managed by Apollo to sell 50% of a 2 GW solar and battery energy storage system (BESS) portfolio in Texas, consisting of three solar projects with 1.7 GW of capacity and two BESS with a total of 300 MW. This transaction will provide $800 million cash to TotalEnergies- $550 million equity from Apollo and $250 million shareholder loan refinancing.
TotalEnergies will retain a 50% stake and remain the operator of the assets, which are Danish Fields, Cottonwood, and Hill Solar I. The electricity production of these projects has either already been sold to third parties or will be commercialized by TotalEnergies. In September, the company celebrated commercial operations at two of those facilities, Danish Fields and Cottonwood, which boast a combined capacity of 1.2 GW, at the time increasing TotalEnergies’ capacity in ERCOT to nearly 4 GW in operation and under construction. Danish Fields, the company’s largest U.S. solar farm, has a 720 MW capacity and 225 MWh of accompanying battery energy storage. The other site, Cottonwood, has a capacity of 455 MW and also boasts 225 MWh of storage. According to a recent American Clean Power market report, Texas has now surpassed 22 GW of utility-scale solar generation capacity, representing about one-fifth of the country’s total. Another 12 GW are under construction, more than the next five states combined.
TotalEnergies is also making headlines for appearing to ease off its commitment to Attentive Energy, a massive offshore wind project the company is developing off the coasts of New York and New Jersey in an area called the New York Bight. Patrick Pouyanne, TotalEnergies’ CEO, told attendees at an energy forum in London last week that he is putting the project “on pause” and will revisit it “in four years,” alluding to incoming U.S. President Donald Trump’s distaste for the offshore wind industry.
By the end of 2024, TotalEnergies’ gross renewable electricity generation installed capacity is expected to surpass 24 GW.
