KKR takes majority stake in sustainability consulting firm ERM

Omers and AIMco sell their majority holding to the private equity giant

Private equity giant KKR has acquired a majority stake in corporate sustainability consulting firm Environmental Resources Management (ERM) from two Canadian funds. 

OMERS Private Equity, an arm of the Ontario Municipal Employees Retirement System and sovereign wealth fund Alberta Investment Management Corporation (AIMco) announced today they had agreed to sell their stake in UK-based ERM to KKR. 

Terms of the deal, which is expected to close in the third quarter of the year, were not disclosed. Omers and co-investor AIMco in 2015 acquired ERM in an off-market deal for an enterprise value of $1.7bn from private equity firm Charterhouse Capital Partners. ERM had been majority-owned by Charterhouse since 2011, when it acquired a 55% stake for $950m.

According to ERM’s financial report for the year ending 31 March 2020, filed last month on UK Companies House, OMERS owns around 42% of ERM, AIMco around 17% and ERM management the remaining stake. 

KKR, which will make its investment through its Core Investment Strategy focused on long-term opportunities, said ERM will remain minority shareholders of the business. 

Founded in 1977, ERM advises clients on sustainability and implementing ESG strategies and best practices. It has over 5,500 staff and 150 offices globally.

Its growth since the investment by Omers and Alberta has been fuelled by 14 M&A transactions. In recent months, ERM has acquired two sustainability-focused businesses – Dutch consultancy firm Sustainalize, in April, and Arcus Consultancy Services, a renewable energy consultancy, in January. ERM also owns London-based think-tank SustainAbility.

Keryn James, ERM’s CEO, said: “We are thrilled to announce this new partnership with KKR, which will drive a long-term path for growth for ERM – broadening the scope of our client service and deepening our impact on sustainability.”