Swedish renewable energy company OX2 has agreed to acquire Australia-based renewable developer ESCO Pacific for a total consideration of A$126m on a debt-free basis.

ESCO Pacific is currently owned by Shell with a 49% stake, alongside the founder Steve Rademaker and other private investors.

Under the terms of the acquisition, Steve Rademaker will stay with the company for two years, initially as managing director and as an advisor to management, thereafter.

OX2 and Shell have will maintain a partnership dialogue regarding future collaboration, including PPA offtake opportunities.

The transaction is expected to be completed by the end of this month, subject to the fulfilment of certain customary closing conditions.

OX2 CEO Paul Stormoen said: “I am very happy to announce our entry into the Australian market and to welcome an experienced local team to OX2.

“Through this transaction, we get an attractive development portfolio in a growing renewables market, while also significantly strengthening our capabilities within solar and energy storage. This gives us a solid foundation for profitable expansion in Australia.”

ESCO Pacific managing director and founder Steve Rademaker said: “We have found a great buyer for ESCO Pacific. OX2 is a strong player with an excellent track record, and they will no doubt have the ability to significantly grow the footprint in Australia.”

Established in 2015, ESCO Pacific is a renewable developer with a project development portfolio comprising 1,420MW, including 1,220MW solar and 200MW energy storage.

The company developed and taken more than 800MW to construction since its launch in 2015 and has several pre-early projects that are expected to be included in the project development portfolio during 2023.

The Australian government is committed to achieving net zero by 2050 and it aims to make significant infrastructure investments to boost renewable capacity.

OX2 believes that there is considerable potential for value creation in ESCO Pacific and plans to scale up operations through acquisitions in solar and energy storage.

In addition, there is a contingent consideration amounting to up to A$17m to the founder based on sales and margins in 2025-27 from the acquired project development portfolio.

PwC Australia served as the lead financial advisor and legal advisor to OX2, while Lazard served as the lead advisor to the sellers, on the transaction.