SunEdison Inc. (SUNE) and TerraForm Power Inc. (TERP) has agreed to buy privately-held First Wind, a developer and operator of wind projects, for $2.4 billion, giving them access to the U.S. wind energy market.
"The acquisition of First Wind transforms both SunEdison and TerraForm Power into diversified renewable energy companies and will make SunEdison the leading renewable power plant developer in the world," said Ahmad Chatila, President and Chief Executive Officer of SunEdison.
The total consideration of $2.4 billion, includes $1.9 billion in upfront consideration and a $510 million earn-out. SunEdison's portion of the consideration is $1.5 billion. The deal is expected to close during the first quarter of 2015, subject to customary closing conditions. SunEdison is the parent company of TerraForm Power, which owns and operates its solar farms.
SunEdison lifted its 2015 project installation guidance to 2.1 to 2.3 GW from earlier forecast of 1.6 to 1.8 GW. SunEdison shareholders are expected to benefit from increased project development cash flow, asset management revenues, and dividend payments from TerraForm Power.
The acquisition is immediately accretive to TerraForm Power and has raised its dividend to $1.30 per share, up 44 percent from current dividend of $0.90.
"This acquisition is immediately accretive and establishes TerraForm Power as a leading asset owner in the wind energy market while demonstrating the Company's commitment to delivering on TerraForm Power's diversified growth strategy," said Carlos Domenech, President and Chief Executive Officer of TerraForm Power.
SUNE closed Monday's trading at $16.61, down $0.32 or 1.89%, on the Nasdaq. The stock, however, gained $1.09 or 6.56%, in the after-hours trade.
TERP closed Monday's trading at $25.84, down $0.10 or 0.39%, on the Nasdaq. The stock gained $0.31 or 1.20% in the after-hours trade.
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