TORONTO—Brookfield Asset Management is poised to expand its extensive solar and wind power holdings with a friendly takeover of two U.S. companies affiliated with SunEdison Inc., which has been under bankruptcy protection for nearly a year.
The offer values TerraForm Power’s total equity at US$1.7 billion and TerraForm Global at US$787 million, not counting debt to be assumed. The Toronto-based group would also provide TerraForm Power with US$500 million in funding for growth after the deals close.
“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,” said Sachin Shah, Brookfield senior managing partner, in a joint news release with TerraForm Power.
The proposed transactions announced Tuesday are subject to several conditions, including regulatory, shareholder and court approvals—particularly the U.S. court handling SunEdison’s bankruptcy case, filed last April.
The boards of TerraForm Power and TerraForm Global have approved the respective transactions, which also have the support of SunEdison.
The two TerraForm companies were separate public entities used by SunEdison to manage projects under contract.
TerraForm Power has 2,983 megawatts of electricity generating capacity, primarily wind and solar operations in the U.S., Europe and Canada. TerraForm Global owns or has contracts to acquire a total of 952 MW of wind and solar generation capacity in Brazil, India, China and other countries outside North America.
Under the proposal, holders of TerraForm Power class A shares would get the equivalent of US$11.46—either fully in cash including US$1.94 from a special dividend or, optionally, US$1.94 cash and one share of TerraForm Power. TerraForm Global class A shareholders are being offered US$5.10 per share in cash.
With TerraForm Power, Brookfield would pay about US$622 million to buy 65.3 million shares with proceeds to be distributed among SunEdison and class A shareholders other than Brookfield. The Toronto company already has a 34 per cent stake in TerraForm Power that will rise to 51 per cent after the deal closes.