Pinnacle is a leader in the production and sale of wood pellets used as fuel in thermal power generation plants.

www.pinnaclepellet.com

Investment

C$71 million

Fund

ONCAP II

Period

May 2011 – April 2021

ONCAP Team

Gregory Baylin

Pinnacle Renewable Energy logo

Transaction Summary

ONCAP acquired a majority stake in Pinnacle Renewable Energy Inc. (“Pinnacle”) in May 2011, with the balance of the equity retained by founding shareholders and senior management. In February 2018, ONCAP took the company public and continued to own a significant minority stake in the business until April 2021. 

Business Description

Based in Richmond, British Columbia, Pinnacle is a leader in the production and sale of wood pellets used as fuel in thermal power generation plants in Europe and Asia. Founded in 1989, at ONCAP's exit the company operated nine wood pellet production facilities throughout western Canada, one production facility in Alabama and one export shipping terminal in British Columbia and was the second largest manufacturer of wood pellets in the world.

Accomplishments and Outcomes 

ONCAP was attracted to the company’s: (i) strong market position in a growing global market; (ii) highly contracted business model; (iii) blue chip customer base; (iv) robust operating capabilities; (v) proximity to a large fibre supply basket; and (vi) diversified and flexible production facilities. ONCAP, in partnership with management, created value at Pinnacle by: (i) growing production capacity through new facility construction, existing facility expansion and acquisitions; (ii) optimizing and building additional redundancy into its logistics chain; (iii) improving fibre security; (iv) enhancing the depth of the management team; and (v) diversifying its customer base and production footprint.

ONCAP monetized its ownership position in three transactions: the IPO in 2018; a secondary sale of shares through a public market financing in 2018; and as part of the sale of 100% of the company to Drax plc in April 2021 through a take private transaction.