TerraForm Power Announces Offer to Acquire 100% of Leading European Renewable Power Business, Saeta Yield
TerraForm Powerhas launched a tender offer to acquire 100% of Saeta’s outstanding shares
- The tender offer is irrevocably supported by Saeta shareholders who together own more than a 50% interest and have committed to sell into the offer
- Saeta owns and operates 1,028 megawatts of rate-regulated and contracted solar and wind assets, located primarily in
- Acquisition of Saeta significantly increases TerraForm Power’s overall portfolio and establishes a scale presence in its target Western European market
- Transaction is highly accretive to
TerraForm Powerand improves its balance sheet and credit profile TerraForm Powerintends to finance the transaction with a $400 millionequity offering, fully backstopped by Brookfield1, with the balance funded from available liquidity
“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,” said
- Highly accretive transaction. The acquisition is highly accretive to
TerraForm Power, with CAFD accretion of 24% on a pro forma basis and returns on equity in excess of TerraForm Power’s target.
- High quality asset base in attractive target market. Saeta’s portfolio is comprised of 100% owned, recently constructed assets primarily in
Western Europe, including 778 megawatts of onshore wind and 250 megawatts of concentrated solar, with an average age of six years and a remaining useful life in excess of 25 years.
- Assets with stable and predictable cash flows. 100% of Saeta’s revenues are generated under stable frameworks with investment grade counterparties. Over 80% of Saeta’s revenues are regulated under the Spanish renewable power regime with limited resource and market price risk. The remaining 20% of revenues are under long term power purchase or concession agreements. Saeta’s revenues have an average remaining regulatory/contractual term of 15 years.
- Multiple value levers.
TerraForm Powerwill have the opportunity to implement multiple value enhancing initiatives that can improve the overall cost profile of the business along with optimizing its capital structure.
- Accelerates deleveraging of TerraForm Power’s balance sheet. The acquisition furthers TerraForm Power’s long-term plan to establish an investment grade balance sheet and accelerates deleveraging of its corporate debt to cash flow ratio towards its 4.0x to 5.0x target.
TerraForm Power’s offer is €12.20 in cash per share of Saeta. The aggregate value of the irrevocable commitments, representing more than a 50% interest in Saeta, is approximately
Due to the accretion of the transaction,
Prior to funding the transaction,
$400 millionequity offering, which Brookfield has agreed to backstop in order to provide a minimum issuance price equal to TerraForm Power’s 5-day VWAP immediately prior to announcement of the transaction1;
- The remaining
$800 millionwill be financed with available liquidity, which TerraForm Powerintends to refinance with a combination of project financings of its unencumbered assets and cash to be released from Saeta’s assets.
The tender offer is expected to be completed in the second quarter of 2018, subject to certain closing conditions including obtaining regulatory approvals.
The transaction has been approved by the Board of Directors of
Additional information with respect to the transaction has been posted on our website at www.terraformpower.com under Events and Presentation.
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Safe Harbor Disclosure
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks, and uncertainties and typically include words or variations of words such as "expect," "anticipate," "believe," "intend," "plan," "seek," "estimate," "predict," "project," "goal," "guidance," "outlook," "objective," "forecast," "target," "potential," "continue," "would," "will," "should," "could," or "may" or other comparable terms and phrases. All statements that address operating performance, events, or developments that
By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, risks related to the expected timing and likelihood of completion of the tender offer for the shares of Saeta, including the timing or receipt of any governmental approvals; risks related to our financing of the transaction, including our ability to issue equity on terms that are accretive to our shareholders and our ability to implement our permanent funding plan, risks related to the integration of Saeta and realization of the benefits of the transaction, risks related to the number of the shares of Saeta that are tendered, including the risk that we are unable to acquire all of the shares of Saeta and are subject to minority shareholder protection rights, the risk that any announcement of the transaction could have an adverse impact on the market price of our common stock, risks related to entering new international jurisdictions, including related to our increased exposure to foreign currency fluctuation and risks and costs associated with the hedging of the Euro; risks related to Brookfield sponsorship, including our ability to realize the expected benefits of the transaction with Brookfield, risks related to wind conditions at our wind assets or to weather conditions at our solar assets, risks related to potential events of default at our project financings, risks related to delays in our filing of periodic reports with the
1 If requested by TERP, Brookfield has agreed to provide a backstop for up to