Enel sells 50% of its smart grid subsidiary gridspertise to CVC


On October 20th Enel S.p.A. informed that it has signed, through Enel Grids s.r.l., an agreement to sell a 50% share in its wholly owned subsidiary Gridspertise s.r.l. to the Private Equity Fund CVC Capital Partners Fund VIII. The deal represents the first JV in Italy in the smart grids sector, as well the first investment by a Private Equity Fund in the business.


Companies Overview


Gridspertise is an energy transition enabler, providing essential hardware, software, and services to electricity infrastructure operators. It was launched in 2021 by boasting Enel’s expertise in the electricity distribution network. As of today, Gridspertise has dozens of Distribution System Operators (DSOs) of different sizes and in different geographies as its clients.

Gridspertise’s products help customers to transform traditional electricity distribution grids into smart grids and respond to the steep growth in power consumption demands. The product portfolio includes:

  • Smart electricity meters, which deliver key data on network status and operations, thus enabling smart tariffs, fraud detection, and grid planning; 
  • Smart grid devices, that are installed at a higher level of the electricity value chain to record and automate energy flows and energy dispatching decisions;
  • Software and services that are the brain of the systems;
  • Augmented reality and virtual reality to operate, monitor, and manage the network, optimize workflows, and train field workers. 

As mentioned before, Gridpertise was launched in 2021 by Enel, one of the major energy companies in Europe, with activities in 29 countries across the world. The company operates through the following business areas: 

  • Enel Grids, the world-leading private electricity distribution operator with 2.2m km of electricity lines in 8 countries;
  • Conventional Generation & Global Trading, focused on energy generation from non-renewable sources and trading activities;
  • Enel Green Power, focused on green electricity production;
  • End Retail, focused on selling gas and electricity to customers;
  • Enel X, provider of solutions for the electrification of cities, industries, and homes;
  • Services and others, among which global e-Mobility, recently launched to focus on the delivery of power to zero-emission vehicles.


2022 9m (Jan-Sep) Ordinary EBITDA breakdown by business area



CVC is a Luxembourg-headquartered alternative Investments Firm with €133bn AuM, 25 offices throughout Europe, North America, and Asia, and that makes investments between €150m and €1.5bn in companies with Enterprise Values between €300m and €10bn operating in a wide range of sectors. The PE Firm has six complementary strategies across PE, Secondaries, and Credit, through which invests on behalf of pension funds and other leading financial institutions:

  • Europe and Americas, focused on control or co-control investments in businesses across these regions;
  • Asia, focused on control or co-control investments in businesses across the region;
  • Strategic Opportunities, launched to target potential opportunities in high-quality businesses that may not suit a traditional PE mandate;
  • Growth, launched to target the large volume of potential opportunities in high-growth technology-related companies;
  • Secondaries, in partnership with Glendower Capital, to target secondaries opportunities globally;
  • Credit, focused on investments in companies across the sub-investment grade corporate credit market in Europe and North America.

The investment in Gridspertise has been carried out via CVC Capital Partners Fund VIII, the flagship fund which raised more than €21bn in 2020 and is mostly focused on Western Europe.CVC has relevant expertise in the Energy and utilities sector, having completed 5 investments in the industry:

  • Public Power Corporation S.A., the largest generator and supplier of electricity in Greece;
  • PKP Energetyka, an electricity distributor and provider of maintenance and emergency responses in Poland;
  • Neptune Energy, a JV between CVC and Carlyle to build a leading independent oil and gas platform;
  • Naturgy, a Spanish-based integrated gas, and electricity utility;
  • Exolum, a Spanish-based integrated pipeline network for refined oil products and related storage.


Industry Overview

The global smart grid market size was approximately equal to USD 35.1bn in 2021 and is projected to grow over years until reaching USD 140.5bn in 2028. Smart grids are technologically advanced electricity supply networks that utilize digital communications to detect in real-time, react to local changes in usage and enable the self-healing of the network automatically in case of disturbance of power. The smart grid market suffered from economic turmoil due to the pandemic, and, besides the issues faced by the manufacturers of hardware components because of the global lockdowns, delays in obtaining the raw materials and other parts from suppliers located in the far-East have emerged as a key factor impacting the industry pace. Nevertheless, the implementation of new projects across several regions in order to meet low-carbon targets is expected to counterbalance the lower growth rate during and in the aftermath of the pandemic.

Considering the end-users, the industry is categorized into utility, which is expected to witness a substantial rise owing to the increase in the deployment of grid technologies across the globe, industrial, residential, and commercial. Instead, based on components, the market can be classified into:

  • Software, expected to drive the rise of investments in the industry because of the efforts in modernizing the electricity grids;
  • Hardware, that will benefit from the initiatives launched by governments and aimed at installing smart electricity grids;
  • Services, that is the segment providing applications, including installation and integration of various modules of utility smart grid operations.

From a geographical perspective, the US are leading the market share globally, with a market valued at circa USD 9.8bn in 2020, poised for further growth especially thanks to ambitious smart cities projects. APAC is expected to follow, with major investments driven by China, India, Japan, Australia, and South Korea. EMEA market, instead, will be mainly driven by Governments’ initiatives in fostering clean power generation in the region, thus focusing on the automation of infrastructures and distribution networks, paramount to minimize outages and revenue losses and to deliver enhanced control with low disruption.

The most active players in the industry are the largest multinational utilities, that have understood the importance of redesigning the electricity grids to meet the growing energy demand and to increase transmission capacity. These include some established companies such as ABB, Hitachi, and Siemens, whereas relevant investment from PE Sponsors in the industry came from Oaktree, Insight Partners, and Antin Infrastructure Partners.


Deal Rationale

Born in 2021 leveraging on Enel’s expertise in developing, testing, and scaling up the best technologies to operate smart grids all over the world, Gridspertise today delivers its technologies based on a significant intellectual property portfolio of field-proven solutions to dozens of Distribution System Operators (DSOs) of different sizes and in different geographies. The company is already present in Europe, Latin America, and North America, and seeks to expand in APAC, where the investment in smart grids will drive infrastructure upgrade projects in the near future. 

Smart grids are growing in demand. Utilities, policymakers, and communities have agreed for years that the aging electric transmission and distribution (T&D) grid needs to be significantly upgraded to withstand the challenges of the future. Furthermore, recent events and the current market environment have made the situation more urgent than ever:

  • Customer needs are evolving, sharply accelerated by COVID-19. Customers were already increasingly adopting digital and mobile channels, a trend further accelerated by the pandemic and the subsequent physical-distancing measures. With greater acceptance of working from home, access to reliable electricity service has become paramount;
  • Increasing operational risks are changing the calculus for new investments. Climate change and cyberattacks pose increasing levels of risk, and they are here to stay;
  • Distributed energy resources (DERs) are changing the grid’s value proposition. The T&D grid faces increasing pressure to integrate new technologies, such as electric vehicles (EVs), distributed solar generation, and energy storage, in a rapid, safe, and low-cost way. While grid planners, control-center operators, and engineers face significant challenges in managing the complexity of the two-way electric grid, they can take advantage of new capabilities to support grid operations, such as smart inverter control and vehicle-to-grid and managed charging;
  • Increasing pressure from Governments and Supranational organizations. Recently, the European Commission published the Action Plan on Digitalizing the Energy System, which highlights the need to support grids to improve energy efficiency and speed up the roll-out of renewables. The Plan implies an expected investment of approximately 584bn euros on this product will be needed by 2030.

As a result of these trends, modernizing the grid is now critical and therefore Governments are ramping up investment programs for grid modernization, digitalization, and resilience while supporting the development of distributed energy resources and renewable generation at medium and low voltage levels.

 As proven by another recent deal in the industry, the acquisition of a majority stake into SNRG, a UK developer and operator of smart grids, by Antin Infrastructure Partners, the commitment of financial sponsors alongside firms with relevant expertise in the field can help to scale rapidly and meet the increasing demand that is being driven by policy and current trends.

By partnering with CVC, Enel could benefit from an improvement in go-to-market capabilities and an optimization in operational activities. Furthermore, by leveraging CVC’s international presence and cross-country capabilities, Gridspertise could diversify its geographical footprint. On the other side, the PE Fund, via the investment in Gridspertise, has seized the opportunity to leverage the growth of the energy transition by entering a sector that is expected to grow at a significant CAGR in the next years, with low risks and a very interesting financial profile, since the deal represents a crossover transaction between PE and infrastructure.


Deal Structure

Following the transaction, Enel and CVC will operate the Company under a Joint Control regime, meaning that any new legal entity separate from the contracting companies will be originated, but rather that Enel and CVC will cooperate on the realization of a shared industrial goal, supporting the growth of Gridspertise and accelerating the digital transformation of electricity infrastructures in the energy transition process by deploying the resources brought by CVC and sharing the investment risk.

According to the agreement signed on 20th October, CVC will pay a total consideration of about €300m, equivalent to an Enterprise Value of €625m, which could reach up to €1,000m through potential deferred payments. The terms of the transaction were not disclosed. However, as of the 31st of December of 2021, Gridspertise, which was launched earlier last year and started its trading activities on 1st June 2021, reported total revenues of approx. €91.1m and an EBITDA of circa €16.6m, with an 18.2% margin.

However, due to the lack of detailed guidance and disclosure on 2022 Budget results, it is a long shot in the dark to determine the deal implied multiples. Considering operational performance, about 6.5m smart meters were expected to be sold, a considerable growth over the previous year (about 1.1 million in 2021, clearly impacted by the shorter period of operation). For this reason, we expect the financial results to record significant growth, in line with the expansion of the business.

The overall transaction is expected to generate a positive impact on the Enel Group’s EBITDA of approximately €500m, alongside an expected positive effect on the Group’s consolidated Net Debt of around €300m. The closing of the deal, expected by the end of 2022, is subject to certain conditions precedent customary for these kinds of transactions, including the achievement of various administrative authorizations, specifically relating to the golden power procedure with the Presidency of Italy’s Council of Ministers and to the clearance to be issued by the competent Antitrust Authorities.



Authors: Francesco Puricelli, Alessandro Gallone, Amos Michele Appendino, Hélie de L’Epine, Dietmar Del Vecchio

Sources: CVC, Enel, Gridspertise, Mergermarket, BeBeez, Finanza Milano