On Monday, the Ontario Teachers Pension Plan Board, whose CAD 221.2 billion (about $183 billion) in managed pension assets make it Canada’s single-largest single-profession retirement investment plan, announced that it has agreed to buy all of Evoltz Participações S.A, an electricity transmission platform in Brazil. The seller is private equity giant TPG, the global investment giant that manages more than $91 billion in client assets, which also founded the Brazilian power company in 2018. Evoltz comprises seven electricity transmission lines totaling more than 3,500 km across 10 states in Brazil. Price and other deal terms were not made public as of Monday.
“Evoltz is a highly attractive portfolio of power transmission concessions that provides reliable power to businesses and consumers across Brazil,” said Dale Burgess, Senior Managing Director, Infrastructure & Natural Resources at Ontario Teachers’. “Our strategy focuses on allocating significant capital to high-quality core infrastructure assets with lower risks and stable inflation-linked cash flows. Electricity transmission businesses are particularly attractive given their importance in facilitating a transition to a low-carbon economy.”
In announcing the transaction on Monday, Ontario Teachers noted that it has extensive experience investing in regulated electricity transmission and distribution businesses, as well as the broader energy sector.
Earlier this year, Ontario Teachers’ acquired a 40 percent stake in Caruna, Finland’s largest electricity distribution company. It has been active in Chile’s transmission and distribution sector for over 12 years, through a 50 percent ownership stake in Saesa. The acquisition of Evoltz represents a significant infrastructure investment adding to Ontario Teachers’ portfolio of high-quality investments in Brazil and across Latin America.
“Since founding Evoltz three years ago with the acquisition of seven transmission assets from judicial recovery, we have been proud to work with management to turn-around the prospects for Evoltz and establish it as a leading independent operator in Brazil’s energy transmission sector,” said Edward Beckley, Partner at TPG. “Today, having expanded and consolidated its operations, Evoltz plays an important role in delivering green, renewable energy to major cities and population centers across the country. We look forward to its next chapter under Ontario Teachers’ leadership.”
“I would like to take this opportunity to thank TPG, our board of directors, and employees for the hard work and support in building and transforming Evoltz into a leading operational electricity transmission company,” said João Nogueira Batista, CEO of Evoltz. “We are pleased to welcome Ontario Teachers’ as our new shareholder and are excited to work with them to drive the company to new heights.”
The transaction is expected to close in the third quarter of 2021 and is subject to customary closing conditions and regulatory approvals.
It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.6% since the plan’s founding in 1990.
