Argos seals biomass deal, raises €45m

Argos Soditic has acquired a 70% stake in industrial engineering firm Termoindustriale, while its SME-focused affiliate has raised €45m.

Argos Soditic has acquired Piedmont-based power plant designer Termoindustriale for an undisclosed fee in an unleveraged buyout. It has bought a majority stake from the founding family, which retains 30 percent of the business.

Termoindustriale specialises in the design and construction of power plants from renewable sources, especially liquid biomass. Argos investment manager Karel Kroupa said the firm hopes to capitalise on a “European-wide trend to increase the proportion of electricity coming from renewable sources”.

European Commission figures suggest that almost 20 percent of Europe’s total electricity consumption came from renewable sources in 2009, with biomass occupying 4.2 percent of that share. Kroupa said there is a growing market for liquid biomass – especially in Italy – due to the country’s reluctance to invest in nuclear energy as an alternative to coal and oil in order to meet the EU targets.

The deal was the 15th from Argos Soditic’s fifth fund which held a final close in 2006 on €275 million. Kroupa said 50 percent of the current fund has been deployed, but there is no specific cut off point or time frame to begin fundraising.

In related news, Argos Soditic’s affiliate, Argos Expansion, has held a first close for a SME-focused fund on €45 million. The fund, which has attracted commitments from the European Investment Fund and French state-backed investor CDC Entreprises, has a target size of €120 million.