Earthmill

The company

At the time of investment, Earthmill was the UK’s pre-eminent supplier of 50-250KW turbines, predominantly to the farming community. The investment was to enable Earthmill to enter in joint ventures with the farmers to jointly own a portfolio of turbines.

Investment rationale

Earthmill had an experienced management team and a considered plan to develop a portfolio of  long life, high income assets. This would offer the opportunity to either be sold en masse to a infrastructure fund or retained for 20 year income.

The exit

The portfolio built well, before a change in Government policy, curtailing all planning permissions for onshore turbines enforced an abrupt industry wide cessation in development projects.

At this point the shareholder value plan changed from maximising the medium term growth in turbine numbers, provided they were above our minimum return on capital threshold, to ensuring reliable recurring revenue from Earthmill’s maintenance business and the turbine fleet, in a market that was in considerable turmoil.

The fleet grew to 46 joint venture turbines and we worked closely and calmly with management to deliver maximum value from the fleet via a measured realisation program over a c4 year period, with sales of cohorts of turbines to a number of different purchasers.

This cooperative approach, which required give and take between management shareholders and investor shareholders who trusted each other was to the benefit of all Earthmill stakeholders.