M&A

SunEdison Sells Yieldco to Brookfield for $787M

The deal means bankrupt SunEdison's financial woes will no longer affect TerraForm Global, which had been seeking a buyer.
Matthew HellerMarch 7, 2017
SunEdison Sells Yieldco to Brookfield for $787M

TerraForm Global and TerraForm Power, the two “yieldcos” of bankrupt solar energy firm SunEdison, are breaking away from their parent through a pair of deals with Canada’s Brookfield Asset Management.

In one of the deals announced Tuesday, Brookfield will buy TerraForm Global for about $787 million in cash and assume approximately $455 million in net debt, representing an enterprise value of approximately $1.3 billion. At $5.10 per Class A shares of TerraForm Global, the transaction represents a 20% premium to the stock’s Monday closing price.

Additionally, Brookfield, which owns 260 renewable power plants, agreed to invest $622 million in TerraForm Power, increasing its stake from 12.1% to 51%. It will pay $11.46 per Class A share.

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In trading Tuesday, TerraForm Global shares rose 15.9% to $4.92, while TerraForm Power climbed 3.6% to $12.01.

Neither of the yieldcos was part of SunEdison’s Chapter 11 bankruptcy filing in April 2016. But as Solar Industry reports, SunEdison’s financial woes have weighed heavily on their operations and they have been searching for buyers or new sponsors “in an effort to break away from their parent and remain viable companies.”

Yieldcos are publicly traded units that hold renewable energy assets such as solar power plants and wind farms, including those bought from the sponsor or the parent company.

“We are pleased to have reached a successful completion of TerraForm Global’s strategic alternatives process to maximize value for our shareholders,” TerraForm Global CEO Peter Blackmore said in a news release. “After a thorough review of alternatives and the significant steps taken by the board and management to best position TerraForm Global for success, we are confident a sale to Brookfield is the best possible transaction for our shareholders.”

TerraForm Global owns and operates more than 30 wind and solar plants with a capacity of 952 megawatts across developing countries such as Brazil, China, and India. TerraForm Power has close to 3 gigawatts of wind and solar farms across the U.S., the U.K., Canada, and Chile.

SunEdison’s Chapter 11 filing was one of the largest non-financial bankruptcies of the past decade.