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KKR & Co. has agreed to buy sustainability consultancy ERM Group Inc. at a time when the business world is paying ever-closer attention to green issues amid pressure from investors.
The private equity firm has acquired a majority stake in ERM from Canada’s OMERS Private Equity and Alberta Investment Management Corp., according to a statement Monday confirming an earlier Bloomberg News report. ERM’s management team and partners will remain minority investors.
Financial details were not disclosed. The deal values ERM at about US$2.7 billion, including debt, people familiar with the matter said, asking not to be identified discussing confidential information.
“This long-term partnership with KKR will allow us to expand and accelerate our client impact, and bring new capabilities and technologies to the business of sustainability,” Keryn James, ERM’s chief executive officer, said in the statement.
ERM advises companies in industries from mining to manufacturing on the environmental and social impact of their operations. The group employs more than 5,500 people in over 40 countries. It generated net revenue of US$792 million in 2020, 9 per cent more than the previous year.
“It’s a very thematic investment and it’s only going one direction,” said KKR partner Tim Franks.
OMERS and AIMCo bought ERM in 2015 for US$1.7 billion, including debt, from Charterhouse Capital Partners.
KKR has invested in ERM through its core investments strategy, which typically holds assets for longer periods. It plans to grow the business through mergers and acquisitions, the people said.
The deal is KKR’s largest in Europe this year and adds to almost US$13 billion of acquisitions by the firm since the start of 2021, according to data compiled by Bloomberg. KKR has been one of the world’s most acquisitive buyout firms throughout the coronavirus pandemic and is currently in discussions about a takeover of public sector infrastructure investor John Laing Group Plc.