TerraForm Power Announces Expected Closing of 100% of Saeta Yield

BETHESDA, Md., June 08, 2018 (GLOBE NEWSWIRE) -- TerraForm Power, Inc (Nasdaq:TERP) (“TerraForm Power” or the “Company”) today announced that Spain’s National Securities Market Commission (“CNMV”) has confirmed a 95% acceptance of the Company’s tender offer to acquire all of the shares of Saeta Yield, S.A (“Saeta” of “Saeta Yield”). The CNMV also set the closing date for the Company’s acquisition of 95% of Saeta Yield for June 12. With greater than 90% of the shares being acquired, the Company will pursue a statutory squeeze out to procure the remaining 5% of the shares, which is expected to close on July 3.

“We are very excited about the positive response to our tender offer for this high quality renewable power company,” said John Stinebaugh, Chief Executive Officer of TerraForm Power. “With 100% of Saeta’s assets integrated into the TerraForm Power platform, we will be able to accelerate the realization of operational and financial synergies and will enjoy an expanded platform for growth in Europe.”

Transaction highlights

  • Highly accretive transaction.  The acquisition is highly accretive to TerraForm Power, with 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 23 years.
  • Assets with stable and predictable cash flows.  100% of Saeta’s revenues are generated under stable frameworks with investment grade counterparties.  Approximately 77% of Saeta’s revenues are regulated under the Spanish renewable power regime with limited resource and market price risk.  The remaining 23% of revenues are under long term power purchase or concession agreements.  Saeta’s revenues have an average remaining regulatory/contractual term of 14 years.
  • Multiple value levers.  TerraForm Power will 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 to within its 4.0x to 5.0x target.

Funding Plan

To satisfy the $1.2 billion total purchase price, TerraForm Power intends to execute a funding plan comprised of the following sources:

  • A private placement of $650 million of its Class A stock with its sponsor Brookfield Asset Management (“Brookfield”) or its affiliates at the previously agreed back-stop price of $10.66 per share;
  • The remaining $550 million will be financed with available liquidity, which the Company intends to refinance with a combination of project financings of its unencumbered assets and cash to be released from Saeta’s assets.

About TerraForm Power

TerraForm Power owns and operates a best-in-class renewable power portfolio of solar and wind assets located primarily in the U.S., totaling more than 2,600 MW of installed capacity. TerraForm Power’s goal is to acquire operating solar and wind assets in North America and Western Europe. TerraForm Power is listed on the Nasdaq stock exchange (Nasdaq: TERP). It is sponsored by Brookfield Asset Management, a leading global alternative asset manager with more than $285 billion of assets under management.

For more information about TerraForm Power, please visit: www.terraformpower.com.

Contacts for Investors / Media:

Chad Reed
TerraForm Power

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 TerraForm Power expects or anticipates will occur in the future are forward-looking statements. They may include estimates of cash available for distribution (CAFD), dividend growth, cost savings initiatives, earnings, Adjusted EBITDA, revenues, income, loss, capital expenditures, liquidity, capital structure, future growth, and other financial performance items (including future dividends per share), descriptions of management’s plans or objectives for future operations, products, or services, or descriptions of assumptions underlying any of the above. Forward-looking statements provide TerraForm Power’s current expectations or predictions of future conditions, events, or results and speak only as of the date they are made. Although TerraForm Power believes its expectations and assumptions are reasonable, it can give no assurance that these expectations and assumptions will prove to have been correct and actual results may vary materially.

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: risks related to the transition to Brookfield Asset Management Inc. sponsorship, including our ability to realize the expected benefits of the sponsorship; risks related to wind conditions at our wind assets or to weather conditions at our solar assets; risks related to the effectiveness of our internal controls over financial reporting; pending and future litigation; the willingness and ability of counterparties to fulfill their obligations under offtake agreements; price fluctuations, termination provisions and buyout provisions in offtake agreements; our ability to enter into contracts to sell power on acceptable prices and terms, including as our offtake agreements expire; our ability to compete against traditional and renewable energy companies; government regulation, including compliance with regulatory and permit requirements and changes in tax laws, market rules, rates, tariffs, environmental laws and policies affecting renewable energy; risks related to the proposed relocation of the Company’s headquarters; the condition of the debt and equity capital markets and our ability to borrow additional funds and access capital markets, as well as our substantial indebtedness and the possibility that we may incur additional indebtedness going forward; operating and financial restrictions placed on us and our subsidiaries related to agreements governing indebtedness; our ability to successfully realize the anticipated benefits from the acquisition of Saeta Yield, S.A., ; risks related to our ability to implement our funding plan to satisfy the purchase price for shares of Saeta Yield, S.A.; our ability to to successfully integrate the operations, technologies and personnel of Saeta Yield, S.A.; our ability to establish appropriate accounting controls, reporting procedures and regulatory compliance procedures in connection with the acquisition of Saeta Yield, S.A.; our ability to successfully identify, evaluate and consummate future acquisitions; and our ability to integrate future projects we acquire from third parties, or otherwise and realize the anticipated benefits from such acquisitions.

The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data, or methods, future events, or other changes, except as required by law. The foregoing list of factors that might cause results to differ materially from those contemplated in the forward-looking statements should be considered in connection with information regarding risks and uncertainties, which are described in our Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, as well as additional factors we may describe from time to time in other filings with the SEC. We operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and you should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.