SunEdison unit TerraForm to buy wind power plants for $2 billion

TerraForm Power Inc, a unit of SunEdison Inc, today struck a deal to buy 930 megawatt of wind farms in the U.S. and Canada from Invenergy Wind LLC for $2 billion. The acquisition is expected to help SunEdison expand its foothold in the US wind energy market. A spinoff of SunEdison Inc.’s clean-power assets paved the way for the formation of TerraForm past year. The news also helped TerraForm’s shares gain 3.5% yesterday. The Company’s TerraForm Power segment owns and operates clean power generation assets, both developed by the Solar Energy segment and acquired through third party acquisitions that sell electricity through long-term power purchase agreements to utility, commercial, and residential customers. The transaction requires state and federal approval and the companies expect to complete the deal in the fourth quarter. Post-acquisition, SunEdison will become the world’s leading renewable energy development company.

SunEdison says this acquisition won’t be the end of its dealings with Invenergy and sees significant opportunities for future collaboration and growth. The company revealed that the acquisition will facilitate the generation of higher cash flows and asset management revenues, while shareholders will benefit through increased dividend from TerraForm.

Following on the success of its TerraForm Power yieldco, SunEdison filed a Form S-1 with the USA Securities and Exchange Commission in April for an initial public offering (IPO) to raise up to $700 million for new yieldco to be named TerraForm Global Inc.

Furthermore, TerraForm has announced a 26% hike in its 2016 dividend payments translating into $1.70 per share, up from $1.53 per share.

Invenergy chief financial officer and operating business group president Jim Murphy said: “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”.