INVESTMENT ACTIVTY
Global firm invests $584m in environmental marketplaces
Blackstone Group (NYSE: BX) is to invest $US400 million ($584 million) in an Australian business which operates a global marketplace for ESG-inclusive commodities.
The strategic investment in Xpansiv is to be made through the global alternatives firm’s specialist division Blackstone Energy Partners.
Xpansiv had been planning an IPO until the downturn in technology stocks made that unviable.
Xpansiv’s current investors include BP Ventures, Reflective Ventures, S&P Global and Macquarie Group.
According to Blackstone, Xpansiv operates the premier market-infrastructure platform for global carbon and environmental commodities, connecting buyers and sellers of environment al commodities and providing market data for voluntary carbon offsets, renewable energy credits and low-carbon fuels, each of which are critical elements of global decarbonisation.
Snior managing director Bilal Khan said: “We believe environmental commodities are a critical new asset class that must scale exponentially to meet climate change mitigation targets pledged by governments, companies and entire industries. Xpansiv is a leader in this space, and we are delighted to provide the capital and resources to help them further expand their offerings and accelerate their growth.”
Head of Blackstone Energy Partners, David Foley, said: “As a leading private equity investor in the dynamic energy transition market we proactively seek out companies with entrepreneurial management teams that are well-positioned to benefit from fundamental long-term trends. As more corporations make net zero commitments, there is an increasing need to efficiently connect them with – and indirectly provide funding for – the most efficient, high-quality developers of CO2 reduction projects. Xpansiv has a first-mover advantage, and Blackstone’s investment will enable them to capitalise upon that lead, creating a uniquely positioned company with ownership of critical software, technology, and a scalable exchange for trading voluntary carbon offsets and related environmental products. We believe this market will experience exponential growth over the next decade.”
Xpansive chief executive Joe Madden said: “This partnership will help us solidify our leading position in carbon and leverage our platform to scale markets and products to accelerate the energy transition across renewable energy, digital fuels, and beyond.”
Chief strategy officer Nathan Rockliff added: “This partnership will support our strategic path to accelerate our growth in global commodity markets following the acquisitions of SRECTrade, HVB and OTX in 2021 and our investment in APX, the leading provider of registry infrastructure for energy and environmental markets.”
Xpansiv acquired a 20% interest in APX in March and is now expected to move to 100%.
Blackstone’s investment will enable Xpansiv to continue growing organically and through acquisitions. This transaction follows recent acquisitions in the energy transition and climate solutions spaces in US-based companies energy transition accelerator, Legence, and ESG software data and consulting services business, Sphera. Sphere was acquired last year by Blackstone’s flagship buyout fund for $US1.4 billion. The vendor was another private equity firm, Genstar Capital.
Kirkland & Ellis and Clayton Utz provided legal advice to Blackstone on the Xpansive transaction, Perella Weinberg Partners LP served as financial adviser to Xpansiv while Morrison & Foerster LLP and Clifford Chance LLP provided legal advice.
Xpansiv describes itself as the “digital nexus where ESG and price signals merge”.
The company’s main business units include CBL, a spot exchange for ESG commodities including carbon and renewable energy certificates and digital natural gas; H2OX, the leading spot exchange for water in Australia; XSignals, an end of day and historical markets data provider; and EMA, a multi-registry portfolio management system for all ESG-inclusive commodities.
Blackstone Energy Partners has invested more than $US20 billion in private equity deals across a broad range of energy industry sectors.
Image: Xpansive information.