Today (March 7) Canada’s Brookfield Asset Management and TerraForm Global, TerraForm Power, announced that Brookfield will purchase both of the renewable energy YieldCos, which were launched by the now bankrupt SunEdison. The yieldcos were formed to own and operate wind and solar projects and allow others to invest in the projects once they were completed.
Brookfield will acquire TerraForm Global for approximately $787 million in cash and is purchasing the majority (51 percent stake) in TerraForm Power for $11.46 per share.
Though the TerraForm Global transaction Brookfield also will acquire $455 million in debt, representing investment value of approximately $1.3 billion. Through the investments in TerraForm Power it will support future growth with a $500 million equity line.
It’s a big buy into renewable energy for Brookfield. TerraForm Global has 952 megawatts of wind and solar farms across the world that either owns and operates or has contracts to acquire.
“We are pleased to have reached a successful completion of TerraForm Global’s strategic alternatives process to maximize value for our shareholders,” said Peter Blackmore, interim CEO of TerraForm Global and, coincidentally for TerraForm Power. “After a thorough review of alternatives and the significant steps taken by the Board and management to best position TerraForm Global for success, we are confident a sale to Brookfield is the best possible transaction for our shareholders."
The TerraForm Power YieldCo transaction will give TerraForm Power options on roughly 3.5 gigawatts of projects, including 1.2 GWs of operating wind projects and 2.3s GWs of wind and solar projects at development-stage in North America and Western Europe.
“We are pleased to increase our significant investment in TerraForm Power and to contribute our operating expertise in the sector to position the company for growth,” said Sachin Shah, Senior Managing Partner of Brookfield. “We are confident that our significant renewable power operating experience, financial resources and global institutional relationships will provide TerraForm Power with strong financial flexibility and an attractive pipeline for growth moving forward.”
The transactions are not complete, but are slated for completion in the second half of 2017 after going through the review processes they’re subject to.Tweet