The Foresight Group has today announced it is considering proceeding with an initial public offering (IPO) in a move that executive chairman and co-founder Bernard Fairman described as the “next logical step” for the investor.
If the IPO goes ahead, Foresight will apply for admission of its shares to the premium listing segment of the Official List of the Financial Conduct Authority and begin trading on the London Stock Exchange’s main market for listed securities.
This would support the investor’s growth strategy, which covers developing its existing platform, “making further acquisitions, and expanding and diversifying both geographically and into new areas of sustainable investment”, according to Fairman.
When it comes specifically to Foresight’s infrastructure arm, which includes its investments into solar as well as onshore wind, bioenergy and battery storage among other technologies, it is targeting both larger deals – which it said would be partly enabled by increased demand for co-investment structures – and larger projects and investment opportunities.
This would come with larger commitments from its increasingly international investor base, with Foresight also opportunistically looking at further acquisitions such as the addition of the JLEN advisory mandate and management team in 2019, a move which it said has strengthened its fundraising performance.
The company pointed to how the renewables targets for the UK and EU member states will “reshape the future dynamics of electricity production”, with Fairman claiming that Foresight is “extremely well positioned to benefit from the accelerating global stimulus to the renewable energy and infrastructure market”.
In particular, Foresight’s key competitive advantages were listed as its specialist investment capabilities in large and thematically growing, difficult-to-access markets, its integrated investment platform, ability to raise funds consistently from a diverse investor base, recurring revenues and a strong track record of ESG-focused investment.
It expects it would qualify for the London Stock Exchange’s Green Economy Mark on its admission to the main market, with the mark recognising companies that derive 50% or more of their total annual revenues from products and services that contribute to the green economy.
In the 2020 financial year, the Foresight Group generated revenue of £57.3 million, a jump on the £49.5 million generated in the 2019 financial year. Its core EBITDA came in at £12.9 million, again up on 2019’s £11.9 million. For the six months ended 30 September 2020, Foresight generated revenue of £32.4 million, an increase of £4.2 million on the same period of 2019.
Should the investor proceed with the IPO, it is expected to have features such as a premium listing on the Official List of the FCA and admission to trading on the main market for listed securities of the London Stock Exchange. It would also primarily comprise a sale of shares by existing shareholders with a smaller offering of new shares to be issued.
Immediately after admission, Foresight expects up to 50% of its issued share capital to be in public hands and that it would be eligible for inclusion in the FTSE UK Index Series.
A number of other solar and storage investors have launched IPOs and been admitted to the London Stock Exchange in the past, such as Gore Street Energy Storage Fund and Gresham House Energy Storage Fund, both storage based funds.
Meanwhile, companies such as NextEnergy Solar Fund and Downing Renewables & Infrastructure Trust have completed IPOs, with NextEnergy raising gross proceeds of £85.6 million in 2014 and Downing announcing its plans to raise £200 million in late 2020.