TerraForm Power has signed a definitive agreement to acquire net ownership of 930 MW of wind power plants in North America from Invenergy Wind LLC.
TerraForm Power intends to acquire net ownership of 460 MW of the wind power plants from Invenergy with the remaining 470 MW to be acquired by a new warehouse facility, for a combined US$2.0 billion in aggregate consideration.
Average unlevered CAFD of the acquired portfolio is anticipated to be US$141 million annually over the next 10 years, generating a levered cash-on-cash return of approximately 8.4 percent.
The acquired portfolio is comprised of seven contracted wind farms located in the United States and Canada. The assets have a weighted average remaining contract life of 19 years and an average counterparty credit rating of AA.
Invenergy will retain a 9.9 percent stake in the U.S. assets and will provide certain operation and maintenance services for these power plants.
Morgan Stanley acted as lead financial advisor to TerraForm Power. Citi served as joint financial advisor and also acted as lead financing structuring agent. Goldman Sachs acted as exclusive financial advisor to Invenergy. Orrick acted as lead legal counsel to TerraForm Power.
Domenech, TerraForm Power's chief executive officer stated:
"TerraForm Power continues to transform the energy landscape with our acquisition of Invenergy's wind power portfolio. This transaction is expected to be immediately accretive to our shareholders, extend the visibility of our growth trajectory and unlock significant value as we aggregate a highly fragmented industry. Our ongoing partnership with Invenergy, the country's leading independent wind owner and developer, provides further opportunities for collaboration, asset drop downs and dividend growth."
Ahmad Chatila, SunEdison chief executive officer and TerraForm Power chairman commented:
"TerraForm Power's acquisition of the Invenergy wind plants leverages the power of SunEdison's platform which was enhanced with our acquisition of First Wind in January of 2015. The Invenergy transaction creates significant value for our shareholders through the accretion in our TerraForm Power ownership and the acceleration of our Incentive Distribution Rights (IDRs). Together with TerraForm Power, SunEdison's development platform will change how energy is generated, distributed and owned around the world."
Jim Murphy, Invenergy chief financial officer and operating business group president added:
IPP Journal has recently reported on several wind deals globally:
"As an independent, privately-held company, this transaction is consistent with how we finance growth in our capital-intensive industry and reflects the strength of Invenergy's business model. Market interest in these wind projects was strong, reflecting the quality of these renewable energy assets, all of which have long-term power sale contracts."