Alcentra backs CBPE acquisition with unitranche

Alcentra European Direct Lending Fund invests undisclosed amount in Anesco.

Alcentra Limited has provided a unitranche loan to support the acquisition of Anesco, a leading provider of UK energy efficiency solutions, by private equity group CBPE Capital.

Alcentra, which is the private debt arm of BNY Mellon, acted as mandated lead arranger on the loan.

Proceeds will be used to help expand Anesco’s offerings. CBPE bought stakes held by Scottish Equity Partners and Hermes GPE. Terms of the deal were undisclosed.

The transaction completed last week and is the first deal closed from the Alcentra European Direct Lending Fund since it announced a final close on €850 million. The average loan size from the fund will range between €20 and €25 million, PDI understands.

Alcentra was attracted to Anesco by the business’s strong cash flows and the management team, which will remain in place. Natalia Tsitoura, executive director at Alcentra, explained that the capital structure now includes a unitranche loan, which is a blend of senior and junior debt, and equity from CBPE.

Anesco was sold in a bidding process which opened in spring, organised by corporate finance advisor DC Advisory. CBPE’s bid ultimately entered an exclusivity period of six weeks and Alcentra’s financing package was ready within that time frame.

Tsitoura said that its relationship with CBPE as well as speed and understanding of the business helped them with securing the financing. Alcentra had full access to Anesco’s management team which made the process very open and transparent, she explained.

Both banks and other debt funds were in the running to finance the business in partnership with their respective private equity bidders. Tsitoura says that banks in particular find the element of government subsidy involved in such a business difficult to assess however. “Banks tend to back more vanilla businesses and to shy away from more complicated sectors such as the energy sector,” she said.

Over the last couple of years, Anesco has grown revenue from £21 million to more than £100 million (€127.3 million; $156.7 million) to become one of the UK’s fastest growing private business.
Anesco works with local authorities, businesses, housing associations and homeowners across the UK to reduce their carbon emissions.