Brookfield Renewable to Invest in 3,600 MW Global Renewable Power Portfolio

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TerraForm Power, Inc., an owner and operator of clean energy power plants, and Brookfield Asset Management Inc., a global alternative asset manager, have announced that they have entered into a definitive agreement under which Brookfield will assume the role of TerraForm Power’s sponsor and Brookfield will become the controlling shareholder.

Peter Blackmore, Chairman and Interim Chief Executive Officer of TerraForm Power, said:

“With the successful completion of the Board’s strategic alternatives process, the TerraForm Power Board and management team are confident that Brookfield’s sponsorship will enable our company to deliver cash to shareholders while strengthening our operations for future value creation.

This agreement with Brookfield is the culmination of our efforts to separate our operations from SunEdison and to position TerraForm Power for future success. With the support of Brookfield as TerraForm Power’s sponsor, we will gain additional resources to continue to expand our portfolio and increase cash flow on a per share basis. We look forward to working with the talented Brookfield team to achieve a smooth transition.”

Sachin Shah, Senior Managing Partner of Brookfield, said:

“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. 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. We look forward to participating alongside all shareholders in capturing future upside and helping the business to achieve its full potential over time.”

John Dubel, Chief Executive Officer and Chief Restructuring Officer of SunEdison Inc., said:

“SunEdison is supporting this transaction, which it believes maximizes potential proceeds for the estate and aligns Brookfield with the interests of TerraForm Power in the future to create value."

The transaction has been approved by the Board of Directors of TerraForm Power by all directors voting upon the recommendation of the Corporate Governance and Conflicts Committee of TerraForm Power and has also been approved by the Board of Directors of Brookfield. The transaction also has the support of SunEdison.

Key terms of the agreement:

  • 51.0% Brookfield ownership in TerraForm Power post-closing
  • US$11.46 price per Class A share (derived from a pre-SunEdison settlement price of US$12.00 per share), with option for shareholders to elect to receive shares as described below
  • ~3,500 MW Right of First Offer portfolio provided by Brookfield to TerraForm Power, representing ~1,200 MW of operating wind plants and ~2,300 MW of development-stage wind and solar projects in North America and Western Europe
  • US$500 million sponsor equity line offered by Brookfield to support future growth for TerraForm Power
  • US$1.7 billion implied total equity value
  • US$6.6 billion implied total enterprise value

The transaction is expected to be completed in the second half of 2017 and is subject to certain closing conditions, including shareholder approval by the majority of Class A shareholders (excluding SunEdison, Brookfield, their respective affiliates and any persons with whom they comprise a “group” for securities law purposes), regulatory approvals, and the approval of the U.S. bankruptcy court overseeing the SunEdison Chapter 11 case, including the Court’s approval of the settlement agreement between TerraForm Power and SunEdison and the Court’s approval of SunEdison’s vote in favor of the sponsorship transaction. The completion of this transaction is independent of and not subject to the completion of Brookfield’s transaction with TerraForm Global, Inc.

Morgan Stanley, Centerview Partners and AlixPartners acted as financial advisors to TerraForm Power on this transaction. Sullivan & Cromwell LLP and Sidley Austin LLP acted as legal counsel for TerraForm Power. Greenberg Traurig LLP and Hughes Hubbard & Reed LLP acted as legal counsel for the independent directors and the Corporate Governance and Conflicts Committee.

Cravath, Swaine & Moore LLP acted as legal advisors to Brookfield.

Rothschild and Ankura Consulting acted as financial advisors to SunEdison. Skadden Arps acted as legal counsel for SunEdison. For certain of SunEdison’s second lien creditor constituents, J.P. Morgan Securities LLC and Houlihan Lokey acted as financial advisors, and Akin Gump acted as legal counsel

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