Atlantic Power Corp (NYSE:AT) To Sell Wind Portfolio For Approximately $350M
Atlantic Power Corp (NYSE:AT) has entered into an agreement with TerraForm Power Inc (NASDAQ:TERP) for the purchase of its wind generation business segment. The purchase, for $350 million, will be in cash and will be in conjunction to several adjustments.
Atlantic Power Corp.’s wind-generating assets are owned by its subsidiary, Atlantic Power Transmission Inc. The subsidiary will now be owned by TerraForm Power Inc (NASDAQ:TERP)’s subsidiary TerraForm AP Acquisition Holdings, LLC.
The sale will include 5 projects in – Idaho, Oklahoma Goshen North, Meadow Creek, Rockland Wind Farm and several others.
The cash component of the proceeds is $350 million and, with other adjusted interests, the total Enterprise Value is placed at $ 837 million.
As the President and Chief Executive Office of Atlantic Power Corp (NYSE:AT), James J. Moore remarked, the process to sell the assets was preceded by a series of evaluations to refinancing without the need to divest assets in the past six months. The sale will now provide ‘compelling valuation’ of assets and will also enhance financial strength, as well as flexibility, the President remarked.
Moore reported that the sale of wind generation assets to TerraForm Power Inc (NASDAQ:TERP) is part of the bigger business plan. The expansion will now be followed by a business plan which will evaluate proceeds to maximize capital structure. Such moves are expected to benefit shareholders. Besides, the company will also run reductions in the expenses of general and administrative operations so as to lower the level set for 2015. It is also expected to offer attractive cash-on-cash returns with the current investments.
TerraForm Power Inc (NASDAQ:TERP)’s purchase of the wind generating projects will bring Atlantic Power the opportunity to focus on executing the rest of the Key Objectives that the company had targeted to achieve in the 2015 fiscal year. These are likely to be achieved as, post the sale, Atlantic Power will emerge financially stronger and will have higher flexibility.
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