trending Market Intelligence /marketintelligence/en/news-insights/trending/_coooighrxnytifs3i6esw2 content esgSubNav
In This List

TerraForm Power makes bid to acquire European renewable business Saeta Yield

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


TerraForm Power makes bid to acquire European renewable business Saeta Yield

TerraForm Power Inc announced Feb. 7 it launched a voluntary tender offer to purchase 100% of the outstanding shares of European renewable power business Saeta Yield SA.

TerraForm Power offered to buy Saeta for €12.20 in cash per share. If TerraForm Power acquires all of the remaining Saeta shares, the total purchase price will be approximately $1.2 billion. The total value of the binding commitments is approximately $600 million, according to a news release.

TerraForm Power is sponsored by Brookfield Asset Management Inc. TerraForm Power expects to fund the $1.2 billion purchase price through a $400 million equity offering, which Brookfield has agreed to backstop, with the remaining $800 million financed with available liquidity. The $800 million component will be refinanced through a combination of project refinancings of unencumbered assets and cash from Saeta's assets. With a $600 million corporate credit facility and $500 million through its sponsor line with Brookfield, TerraForm Power said it has $1 billion of liquidity under committed facilities.

The transaction is accretive to TerraForm Power with cash available for distribution accretion of 24%. Due to the accretion, the yieldco increased its dividend by 6% to 76 cents per share on an annualized basis. The deal will accelerate TerraForm Power's plan to deleverage and establish an investment-grade balance sheet by moving toward a corporate debt-to-cashflow ratio target of 4.0x to 5.0x.

Saeta owns approximately 1,028 MW of contracted assets, primarily in Spain, including 778 MW of onshore wind and 250 MW of solar, with an average age of six years and a remaining useful life of more than 25 years, according to the news release.

TerraForm Power expects to complete the deal during the second quarter.

"With the Saeta acquisition, we are excited to significantly grow our portfolio of high-quality wind and solar assets and expand our geographic footprint with a scale position in Western Europe,” TerraForm Power CEO John Stinebaugh said.