Brookfield to acquire SunEdison's yieldco platforms
Canada's Brookfield Asset Management has agreed to buy two energy platforms operated by US-based renewable energy producer SunEdison, including one with over half its total capacity in Asia.
The deal will see Brookfield acquire all outstanding Class A shares in TerraForm Global for $787 million, according to a statement, for $5.10 per share - a significant premium to the previous close of $4.25. The firm will also assume about $455 million in TerraForm Global’s debt. In a separate release Brookfield said it will also raise its stake in TerraForm Power from 12.2% to 51% for $622 million.
TerraForm Global focuses on emerging markets and operates 919 megawatts of wind and solar power assets in South America, Africa and Asia. Of this, the largest share comes from China and India, which collectively account for 469 MW, with Thailand and Malaysia representing another 51 MW. TerraForm Power concentrates on developed markets such as the US, Canada, Chile and the UK.
The two platforms were founded in 2014 by SunEdison, at the time one of the fastest-growing renewable energy companies in the US. They were intended to operate on the yieldco model, in which SunEdison would buy or develop renewable energy assets, get them in good working order, and transfer them to one of the TerraForm companies to manage. The TerraForm companies would pass most of their income back to the parent.
However, the debt that SunEdison took on to support its acquisitions proved unsustainable and the company filed for bankruptcy last year.
TerraForm Global’s most recent annual report records revenue of $124 million for the year ended December 2015, up from $39 million the year before. Over the same period, however, the company’s net loss grew from $5 million to $371 million.
A more recent filing indicates improvement, with $159 million in revenue for the nine months ended September 2016, up from $73 million for the same period the prior year. The net loss for the same time frame dropped from $119 million to $13 million.
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