Hong Kong billionaire Li Ka-shing agreed to acquire CVC Capital’s German smart-meter business Ista International GmbH for about €4.5bn ($5.3bn), including debt.
Li will make the investment through Cheung Kong Property Holdings Ltd and CK Infrastructure Holdings Ltd, which will control 65% and 35% of the company respectively, the companies said in a statement on Thursday. The deal must still be approved by antitrust officials.
CVC took a majority stake in Ista in 2013 in a deal that valued the company at €3.1bn, people familiar with the matter have said. Smart-meter assets have become attractive to bidders in recent years ahead of a European Union goal to replace at least 80% of electricity meters with smart metres by 2020 in a drive to reduce emissions.
The deal contributes to Cheung Kong Property’s push to diversify revenue beyond the property sector, said Marvin Lo, a Hong Kong-based analyst with Mizuho Securities Asia. The valuation of the deal is fair, as it is in line with similar smart-meter transactions, Lo said.
RBC Capital Markets was sole financial adviser to Cheung Kong Property and CK Infrastructure. The deal has a break up-fee of €200mn if the buyer or seller backs out.
Shares of Cheung Kong Property were unchanged at HK$62.80 at the close on Friday in Hong Kong, while the city’s benchmark Hang Seng Index dropped 0.6%. CK Infrastructure gained 2.3% to HK$72.85.
Ista specialises in heat and water metres for apartment buildings and commercial properties and uses technology to help customers monitor and reduce energy use and maintain smoke alarms remotely. The company had sales of €850.4mn from about 12mn customers last year, according to its website.
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