Offshore Acquisition

The acquisition announcement last week concerning PNE Wind’s purchase of three offshore wind projects from Bard Engineering shouldn’t surprise.

After all, the high-profile financial and operational battles that have been playing out at Bard Engineering have inevitably resulted in some quick-fire sales.

Sales that have provided a welcome boost to the balance sheet and that have helped to significantly de-risk the German business. However, that’s not the really interesting element.

The curious part is the price paid.

For, at just €17m for the three North Sea Atlantis projects (I, II and III), PNE Wind has landed itself a potentially lucrative set of offshore wind projects that are already in the early stages of planning and approval.

Sure, construction is still a fair way off and sure, Bard has negotiated a smart set of variable closing conditions that could result in subsequent payment instalments.

However, that doesn’t distract from the sheer size and scale of the initiatives. And that alone speaks volumes for the escalating ambitions of the developer.

Indeed, over the past thirty-six months it appears that PNE Wind – a business that was listed on the Frankfurt Stock Exchange all the way back in 1998 – has suddenly found another gear.

It’s a shift that started in August of 2011.

The firm had recently confirmed its appointment by the Scottish Forestry Commission to assist it in the development of onshore wind farms and it had sold exclusivity rights to its first offshore project, Nautilus II. The developer, therefore, was generating good cash flow and was in a high spirits.

It was a mood that wasn’t going to disappear.

For twelve months later – in August 2012 – the firm sold three offshore wind farms – Gode I, II and III to DONG Energy. The first two of these three projects are scheduled for completion in 2015 and the third project is in the final stages of permitting and approval.

Confidence, therefore, has been high for some time. And it’s this level of ambition that’s no doubt provided that additional shot in the arm to not only acquire a majority stake in one of its key competitors, WK Nord AG, but that’s ultimately led it to take on additional project risk through this latest development deal.

For the 180 staff, led by Martin Billhardt, that provides a strong incentive to continue to grow – with the recent bond issuance having helped bolster the balance sheet and finance future growth.

In real terms, while this has loaded the developer with considerable upfront costs, it has also enabled it to double its existing presence in the North Sea.

Inevitably, it’s a well-calculated risk that’s to a large extent dependent on the German political elite maintaining the existing subsidy and support status quo.

In recent years, and with the decline of the domestic nuclear market, that’s been taken for granted. However, grid connections continue to cause headaches and the German population is heading to the polling stations this weekend.

For now, stability and confidence remains – and for the likes of PNE Wind, that means that maintaining momentum and moving, fast.

The acquisition announcement last week concerning PNE Wind’s purchase of three offshore wind projects from Bard Engineering shouldn’t surprise.

After all, the high-profile financial and operational battles that have been playing out at Bard Engineering have inevitably resulted in some quick-fire sales.

Sales that have provided a welcome boost to the balance sheet and that have helped to significantly de-risk the German business. However, that’s not the really interesting element.

The curious part is the price paid.

For, at just €17m for the three North Sea Atlantis projects (I, II and III), PNE Wind has landed itself a potentially lucrative set of offshore wind projects that are already in the early stages of planning and approval.

Sure, construction is still a fair way off and sure, Bard has negotiated a smart set of variable closing conditions that could result in subsequent payment instalments.

However, that doesn’t distract from the sheer size and scale of the initiatives. And that alone speaks volumes for the escalating ambitions of the developer.

Indeed, over the past thirty-six months it appears that PNE Wind – a business that was listed on the Frankfurt Stock Exchange all the way back in 1998 – has suddenly found another gear.

It’s a shift that started in August of 2011.

The firm had recently confirmed its appointment by the Scottish Forestry Commission to assist it in the development of onshore wind farms and it had sold exclusivity rights to its first offshore project, Nautilus II. The developer, therefore, was generating good cash flow and was in a high spirits.

It was a mood that wasn’t going to disappear.

For twelve months later – in August 2012 – the firm sold three offshore wind farms – Gode I, II and III to DONG Energy. The first two of these three projects are scheduled for completion in 2015 and the third project is in the final stages of permitting and approval.

Confidence, therefore, has been high for some time. And it’s this level of ambition that’s no doubt provided that additional shot in the arm to not only acquire a majority stake in one of its key competitors, WK Nord AG, but that’s ultimately led it to take on additional project risk through this latest development deal.

For the 180 staff, led by Martin Billhardt, that provides a strong incentive to continue to grow – with the recent bond issuance having helped bolster the balance sheet and finance future growth.

In real terms, while this has loaded the developer with considerable upfront costs, it has also enabled it to double its existing presence in the North Sea.

Inevitably, it’s a well-calculated risk that’s to a large extent dependent on the German political elite maintaining the existing subsidy and support status quo.

In recent years, and with the decline of the domestic nuclear market, that’s been taken for granted. However, grid connections continue to cause headaches and the German population is heading to the polling stations this weekend.

For now, stability and confidence remains – and for the likes of PNE Wind, that means that maintaining momentum and moving, fast.

The acquisition announcement last week concerning PNE Wind’s purchase of three offshore wind projects from Bard Engineering shouldn’t surprise.

After all, the high-profile financial and operational battles that have been playing out at Bard Engineering have inevitably resulted in some quick-fire sales.

Sales that have provided a welcome boost to the balance sheet and that have helped to significantly de-risk the German business. However, that’s not the really interesting element.

The curious part is the price paid.

For, at just €17m for the three North Sea Atlantis projects (I, II and III), PNE Wind has landed itself a potentially lucrative set of offshore wind projects that are already in the early stages of planning and approval.

Sure, construction is still a fair way off and sure, Bard has negotiated a smart set of variable closing conditions that could result in subsequent payment instalments.

However, that doesn’t distract from the sheer size and scale of the initiatives. And that alone speaks volumes for the escalating ambitions of the developer.

Indeed, over the past thirty-six months it appears that PNE Wind – a business that was listed on the Frankfurt Stock Exchange all the way back in 1998 – has suddenly found another gear.

It’s a shift that started in August of 2011.

The firm had recently confirmed its appointment by the Scottish Forestry Commission to assist it in the development of onshore wind farms and it had sold exclusivity rights to its first offshore project, Nautilus II. The developer, therefore, was generating good cash flow and was in a high spirits.

It was a mood that wasn’t going to disappear.

For twelve months later – in August 2012 – the firm sold three offshore wind farms – Gode I, II and III to DONG Energy. The first two of these three projects are scheduled for completion in 2015 and the third project is in the final stages of permitting and approval.

Confidence, therefore, has been high for some time. And it’s this level of ambition that’s no doubt provided that additional shot in the arm to not only acquire a majority stake in one of its key competitors, WK Nord AG, but that’s ultimately led it to take on additional project risk through this latest development deal.

For the 180 staff, led by Martin Billhardt, that provides a strong incentive to continue to grow – with the recent bond issuance having helped bolster the balance sheet and finance future growth.

In real terms, while this has loaded the developer with considerable upfront costs, it has also enabled it to double its existing presence in the North Sea.

Inevitably, it’s a well-calculated risk that’s to a large extent dependent on the German political elite maintaining the existing subsidy and support status quo.

In recent years, and with the decline of the domestic nuclear market, that’s been taken for granted. However, grid connections continue to cause headaches and the German population is heading to the polling stations this weekend.

For now, stability and confidence remains – and for the likes of PNE Wind, that means that maintaining momentum and moving, fast.