Information on the Target

Techem, a prominent German energy efficiency provider, has become a leader in delivering digital-enabled energy and submetering solutions specifically tailored for the real estate sector. The company caters to over 13 million residential units across 18 countries, managing a robust infrastructure of more than 62 million devices. Techem plays a pivotal role in promoting energy efficiency and driving decarbonisation efforts within the built environment.

This acquisition heralds a transformative phase for Techem, which has demonstrated significant growth under the prior ownership of Partners Group’s Private Equity division, La Caisse, and Ontario Teachers’. During this tenure, the company achieved a remarkable approximately 50% increase in EBITDA, surpassing €1 billion in annual revenue, underscoring its robust operational performance and market position.

Industry Overview in Germany

The energy efficiency industry in Germany is experiencing rapid evolution, fueled by stringent regulations and a robust regulatory framework championing sustainable practices. With an increasing focus on reducing carbon emissions, the German government has implemented policies aimed at enhancing energy efficiency, making it a high-priority sector within the broader context of environmental sustainability.

Moreover, Germany's push towards the adoption of renewable energy sources complements the growth of energy efficiency solutions. Residential and commercial sectors are actively seeking innovative technologies to optimize energy consumption, paving the way for companies like Techem to thrive in this dynamic landscape.

Digitalisation stands at the forefront of this transformation, with advancements in smart metering, building automation, and data analytics driving efficiency. This creates a fertile environment for investment, making it increasingly appealing to private equity firms that prioritize long-term thematic growth.

As consumers and businesses alike become more environmentally conscious, the demand for energy efficiency solutions is expected to grow, further solidifying the position of providers like Techem within the industry.

The Rationale Behind the Deal

The acquisition of Techem by Partners Group, along with GIC, TPG Rise Climate, and Mubadala, aligns strategically with their vision of enhancing the company's role in Europe’s energy transition. By investing in Techem, the consortium aims to improve its digital platform and broaden complementary services, such as smart metering and building automation, which are crucial for future growth.

David Daum, Partner and Head of Infrastructure Europe at Partners Group, noted that Techem is well-positioned to take advantage of the increasing focus on decarbonisation, indicating the consortium's confidence in the company's growth potential and the thematic tailwinds in the industry.

Information About the Investor

Partners Group is a global private equity firm that specializes in investments in private market assets. With a strong operational background, it manages a diversified portfolio across various sectors, making strategic investments that align with long-term growth trends. Their Infrastructure unit focuses on essential assets that provide stable, inflation-linked revenues, illustrating the firm's commitment to sustainable investment practices.

Joining Partners Group in this acquisition are notable partners GIC, TPG Rise Climate, and Mubadala. Each of these investors brings valuable expertise and resources to the consortium, further enhancing their collective capability to drive Techem’s growth and strategic initiatives in the energy efficiency domain.

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From an investment perspective, the acquisition of Techem appears to be a commendable move. The emphasis on digitalisation and sustainability aligns with current global market trends, indicating a robust potential for growth. Given Techem's established market presence and strong financial performance, the investment could yield favorable returns as the world continues to pivot towards energy efficiency solutions.

Furthermore, the strategic backing of a consortium including major players like Partners Group supports the view that Techem will receive the resources and attention necessary to enhance its operational capabilities. This could lead to improved services and innovations that meet the increasing demand for sustainable energy solutions.

In summary, this acquisition not only represents a sound investment opportunity but also underscores the growing importance of energy-efficient technologies in the built environment. The alignment of Techem’s business model with global sustainability goals makes it a strategic asset worth monitoring.

Overall, the collaboration of major investment firms in this deal signals a strong belief in the future growth trajectory of Techem, positioning it as an attractive beneficiary of ongoing trends in the energy efficiency market.

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