Two of Canada’s largest pension funds, Montreal-based Public Sector Pension (PSP) Investment Board and the Ontario Teachers’ Pension Plan (OTPP), are exploring options that could include the sale of renewable energy firm Cubico Sustainable Investments. The potential sale has the potential to value the company at around $6 billion or more, including debt. The pension funds are expected to appoint a financial advisor in the coming weeks to assist with the sale process, which could take several months to complete.
While a deal is not guaranteed and subject to market conditions, Cubico’s owners are aiming for a valuation of approximately 10 times its earnings before interest, taxes, depreciation, and amortization (EBITDA) of $641 million in 2022.
Cubico operates wind and solar farms in 12 countries across Europe and the Americas, with a capacity of 2.8 gigawatts (GW). The company is also developing and constructing over 2.2 gigawatts (GW) of additional capacity.
The potential sale of Cubico comes at a time when renewable power developers and energy transition service providers are attracting interest from infrastructure investors and corporate utilities. This aligns with the trend of increasing focus on renewable energy and sustainability.
Public Sector Pension (PSP) Investment Board manages assets worth approximately C$243.7 billion, including a portfolio of hydroelectric, wind, and solar assets in Canada and offshore wind development investments in the United States, Europe, and Asia. Ontario Teachers’ Pension Plan currently oversees net assets worth C$247.2 billion and has made investments in the renewable energy sector.
Both pension funds have a history of working together and were equal owners of Cubico after purchasing Banco Santander SA’s stake in the company in 2016.
Overall, the potential sale of Cubico presents the opportunity for significant value in the renewable energy sector, attracting interest from major investors looking to expand their portfolios in sustainability-focused assets.
