Brookfield seals TerraForm deal

Brookfield Asset Management has agreed to buy renewables energy developer TerraForm Global for $787m in cash and to acquire a 51% stake in TerraForm Power.

The Canadian investor will pay $5.10 for each TerraForm Global share and assume $455m in net debt, which implies an enterprise value of about $1.3bn.

Under a separate deal, Brookfield has agreed to pay $11.46 for each TerraForm Power stock to become its sponsor. This implies an equity value of $1.7bn and an enterprise value of $6.6bn, it said.

Both so-called yieldcos are units of bankrupt US solar company SunEdison.

Brookfield will provide a $500m equity line to support the future growth of TerraForm Power, which focuses on Western Europe and North America.

It will have the right of first offer on 3.5GW of development-stage projects in both regions.

Both transactions are expected to be completed in the second half of year, subject to shareholder, regulatory and bankruptcy court approvals.

“We are pleased to increase our significant investment in TerraForm Power and to contribute our operating expertise in the sector to position the company for growth,” Brookfield senior managing partner Sachin Shah said. 

“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.”

Image: Brookfield