(Bloomberg) -- U.K. buyout firm Bridgepoint Group Plc is seeking to capitalize on growing demand for green investments, buying a minority stake at a consultancy that helps companies cut carbon emissions.
The deal values Amsterdam-based ACT, which handles everything from European emissions trading to energy efficiency and biofuels, at more than $1 billion. The private equity investor, known for its stake in Burger King franchises and sushi fast-food chain Itsu, is buying out Three Hills Capital Partners just over a week after it went public, selling shares in London.
The companies didn't disclose the terms of the deal.
Investors have become more aware of the environmental and social impact of their capital and are pouring cash into companies that can help boost their green credentials. As the world moves away from fossil fuels, regulation is also on their side, with a growing number of countries stepping up climate ambitions and pledging to zero out greenhouse gas emissions by 2050.
“There are a lot of tailwinds in our market,” ACT's Chief Executive Officer Bram Bastiaansen said in an interview. “If you look at the climate ambitions of Europe, they recently launched their climate target for 2030, but also the Biden administration gave us a lot of tailwinds.”
The European Union has pledged to cut emissions by 55% from 1990 levels by 2030 and reach net zero by 2050. Achieving the ambitious target will require expanding its flagship carbon market, boosting the share of energy coming from renewables and banning new combustion-engine cars by 2035, according to proposals unveiled this month by the European Commission.
“Compliance is a challenge for many companies in this area, as regulations are complex and fragmented,” Three Hills Partner Leks de Boer and Arjan Blok, an investment manager, said by email, adding that this is where ACT has a “clear role to play.”
Bridgepoint's investment will help speed ACT's growth plans, which include opening a new office in Singapore to service markets in the Asia-Pacific region, Bastiaansen said. China recently started trading of carbon allowances in a market that's set to become the world's biggest. It will also use some of the new funding to pay down debt.
ACT was founded in 2009 and now services businesses in more than 40 countries. Morgan Stanley advised ACT on the deal while JPMorgan Chase & Co. advised Bridgepoint.
“It's clear that it's a mega trend that's in front of us,” Bastiaansen said.
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