PEP knocks off IFM Investors in LMS battle
The battle for Sims’ LMS Energy has been won.
John Falzon, of LMS Energy. His family owns half of the business alongside Sims Limited. Jeremy Piper
Buyout firm Pacific Equity Partners tangled with IFM Investors’ Net Zero Infrastructure Fund (NZIF) for the biogas and solar power business in a sale process that stretched over five months. PEP emerged victorious on Wednesday morning with a $272 million bid for Sims’ 50 per cent stake.
PEP will also throw in $200 million to support capital growth initiatives. LMS Energy is the country’s largest landfill gas operator, with 36 biogas-to-energy facilities, 26 biogas flaring facilities and six solar projects.
This represents the seventh energy deal for the PEP’s gun Secure Assets team. PEP was self-advised with Allens and EY on hand for support. Sims had Herbert Smith Freehills and Deloitte in its corner.
IFM NZIF, launched in 2022, targets essential infrastructure assets that accelerate the world’s transition to a net-zero emissions economy. Its other investments include US-based renewable natural gas developer GreenGasUSA.
The metal recycling group hired Deloitte to run the sell-down of its 50 per cent interest in LMS Energy in April. From the start, it has been touted as a selective process, with the founders known to be cautious about whom they allow the register.
The business, founded by the Falzon family, traces its origins back to 1982, while Sims has been a shareholder for 22 years. Sims identified the opportunity to sell its interest in LMS Energy following a strategic review process.
First Sentier’s highly acquisitive Igneo Infrastructure Partners was also understood to be in the running.
The sale is expected to the completed during the second quarter of financial year
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