* APR number two to Aggreko in temporary power supply market * Deal includes $359 mln cash, 32.1 mln new Horizon shares
* Horizon will own 59 pct of the new APR Energy
* Horizon shrs suspended; co to be renamed, relisted in Sept
* Aggreko falls 2 pct on competition threat
(Adds detail, background, quotes from executives, analyst)
By Adveith Nair
LONDON, June 13 (Reuters) - Horizon Acquisition HZNA.L is to buy U.S.-based temporary power provider APR Energy for $855 million in a deal that could put pressure on global market leader Aggreko (AGGK.L).
Horizon, a vehicle of Pizza Express and Punch Taverns PUB.L co-founder Hugh Osmond, announced the deal to buy APR Energy, whose shareholders include billionaire George Soros and former U.S. Secretary of State Madeleine Albright, on Monday.
Demand for services provided by companies such as Britain’s Aggreko and market number two APR Energy has been buoyed as rising power demand in developing countries outstrips economic growth, but supply remains hamstrung by lack of financing and the time required to install permanent power capacity.
The industry has also been boosted by the recent earthquake in Japan, which knocked out some generation capacity and landed both companies contracts with Tepco (9501.T).
Horizon said on Monday it is paying for APR Energy, which mainly supplies government utilities in developing nations, with $359 million in cash and 32.1 million Horizon shares. The deal will leave about $275 million of cash on its balance sheet, which will be used to expand APR Energy’s pipeline of projects.
Shares in Aggreko were down 3.9 percent at 0826 GMT on fears of competition from its beefed-up rival. “It (APR) will have substantial resources for investment as a quoted group,” Numis analyst Mike Murphy said. “This suggests Aggreko may face more competition.”
Murphy cut his rating on Aggreko to “sell” from “hold.”
Sales at APR Energy have more than tripled since 2007 to about $126 million in 2010.
“The acquisition is at an attractive price relative to its quoted peer, the injection of our cash accelerates APR Energy’s ability to grow, and its stock market listing will enhance its reputation and provide further access to growth capital if required,” Horizon Chairman Mike Fairey said.
Horizon shareholders will own 59 percent of APR Energy and APR Management will own about 12 percent.
Soros Fund Management, run by hedge fund billionaire George Soros, and Albright Capital Management, run by former U.S. Secretary of State Madeleine Albright are rolling the majority of their investment into Horizon shares and will own about 14 percent and 13 percent respectively of Horizon’s share capital.
Horizon shares, which closed at 950 pence on Friday, have been suspended. Re-admission of Horizon, to be renamed APR Energy, on the London Stock Exchange is expected by end-September.
Editing by Myles Neligan; Editing by Erica Billingham