TerraForm Power Inc. and parent SunEdison Inc. are set to buy several windfarms in the United States and Canada from Invenergy Wind LLC for $2 billion.
In a statement posted on TerraForm's website, the company said it will acquire 930 megawatt of wind power from seven facilities of Invenergy, the largest independent wind power producer in the U.S.
The company will initially buy 460 megawatts, while the rest will be initially held by SunEdison and third party investors through a warehouse facility before eventually being transferred to Terraform. The company said the assets have a weighted average remaining contract life of 19 years.
"This acquisition is expected to add a sizeable, high-quality contracted power plant portfolio to the TerraForm Power and SunEdison family of companies, strengthening one of the largest and highest growth renewable power platforms in North America," said Carlos Domenech, TerraForm Power's chief executive officer.
Terraform said Invenergy will continue to own a tenth of the assets in the U.S. and provide operation and maintenance services to those plants. It added that the continuing partnership with Invenergy allows for more partnerships in the future.
Terraform plans to fund the acquisition of the 460 megawatt of assets with internal cash and bonds. It expects the transaction close in the fourth quarter after getting approval from the Federal Energy Regulatory Commission and thePublic Utility Commission of Texas.
The company said Morgan Stanley was its lead financial advisor to TerraForm Power, while Invenergy tapped Goldman Sachs.Citi served as joint financial advisor and also acted as lead financing structuring agent.
Terraform also raised its dividend target for 2016 to $1.7 per share from $1.53. A Reuters report said TerraForm's shares rose 3.5 percent to $38.86 in extended trading, while SunEdison's shares rose 3.2 percent to $29.90.
SunEdison and TerraForm entered the U.S. wind power market in November when they agreed to buy First Wind for $2.4 billion, the report added.
