KKR acquires majority stake in sustainability giant ERM

19 May 2021 Consultancy.com.au 3 min. read
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Investment firm KKR has won the bid to become the majority shareholder of ERM – the world’s largest consultancy focused exclusively on sustainability. Established locally in 1994, ERM has seven Australian offices.

Founded in 1971 and with offices in Sydney, Melbourne, Brisbane, Adelaide, Perth, Newcastle and Canberra among 160 worldwide, ERM is the world’s largest pure-play sustainability consultancy. KKR will acquire its majority stake from present owners OMERS Private Equity and Alberta Investment Management.

According to the parties, the long-term investment will be focused on further growing the 50-year old consultancy, which itself has already made a trio of acquisitions so far this year; Dutch sustainability consultancy Sustainalize and UK media industry safety firm First Option Safety Group last month, along with renewable energy advisory Arcus in January. Last year, it also picked up energy & climate change consultancy M.J. Bradley & Associates in the US.

KKR acquires majority stake in sustainability giant ERM

“At ERM, we are committed to working alongside every one of the world’s leading organisations to achieve their sustainability goals,” said ERM CEO Keryn James, who has spent close to 30 years with the firm, including roles as Asia Pacific CEO and Global Director of Operations out of Perth. This long-term partnership with KKR will allow us to expand and accelerate our client impact, and bring new capabilities and technologies to the business of sustainability.”

According to a Bloomberg report filed prior to the public announcement – citing sources familiar with the matter – the final deal could see ERM valued at up to $3 billion. Meanwhile, a press release announcing the deal has stated that ERM’s management team and its Partners (580, of more than 5,500 employees in 40 countries worldwide) will remain as minority investors.

The deal is expected to close in the third quarter of this year, pending the usual requirements.

It was also noted that KKR is a long-standing client of ERM’s consulting services. Other clients of the company include some of the world’s biggest names, such as Bayer, Boeing, Johnson & Johnson, General Electric, Unilever, Panasonic and Ford, along with mining and oil & gas giants Rio Tinto, Newcrest, ExxonMobil, BP and Shell among many others. The Australian Department of Defence is also a client (alongside, increasingly, the Big Four).

“True expertise in sustainability and environmental matters is more important than ever. We are proud to invest in an organisation like ERM and its partners, as they continue to help organisations implement ESG management best practices across their operations,” a cohort of KKR senior leaders jointly stated, including partners Mattia Caprioli, Tim Franks and Ken Mehlman, and London-based managing director and director Franziska Kayser and Rami Bibi.