SunEdison (SUNE) to Acquire First Wind
Shares of SunEdison Inc. (SUNE) were trading up +1.29 or +7.77 percent to $17.90 in Tuesday's premarket, after the company announced late yesterday that it would be acquiring First Wind in a deal valued at $2.9 billion. SunEdison shares closed at $16.61, down -0.32 or -1.89 percent in Monday's regular trading session.
Boston, Massachusetts based First Wind, one of the largest developers of wind power in the United States, is an independent, privately owned renewable energy company focusing on developing, financing, constructing and owning and operating utility sized renewable energy projects. The company is currently constructing renewable energy plants in the Northeastern and Western United States, as well as in Hawaii.
The First Wind acquisition will provide SunEdison a position in the U.S. wind market, with the company now expecting to install an additional +2.3 gigawatts of capacity for next year, compared to a present range of 1.6 to 1.8 gigawatts. Also, adding First Wind will expand TerraForm Power's power generating portfolio by at least 50 percent.
Ahmad Chatila, President and Chief Executive Officer of SunEdison stated, "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. By bringing together First Wind's proven development and operational capabilities and SunEdison's global corporate infrastructure and renewable energy development and finance experience, we will be well-positioned to capitalize on the significant growth opportunities in the global wind power markets and drive returns to shareholders of both SunEdison and TerraForm Power."
The transaction will have SunEdison pay an upfront amount of $1.9 billion, with the resting $510 million to be paid in earn-outs. TerraForm Power will acquire First Wind's operating portfolio for $862 million. The deal is expected to be finalized by the first quarter of 2015.
Paul Gaynor, Chief Executive Officer of First Wind said that, "We are excited to become part of the SunEdison team. This new strategic organization will allow us to join with SunEdison to develop and invest in new, long-term-contracted, well-sited and well-run renewable energy projects that deliver clean energy to homes and businesses across the country and internationally. We will be able to leverage our strength in development and operations, proven during the completion of 1.5 GW of wind projects over eight years, with two world-class companies."
Both SunEdison and TerraForm Power stocks are up notably in this morning's premarket, signaling investor confidence in the acquisition. SunEdison stock will open towards the higher end of the stock's yearly range and could test its yearly highs.
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