TerraForm Power announces offer to acquire 100% of Saeta Yield
TerraForm Power announces that it has launched a voluntary tender offer to acquire 100% of the outstanding shares of Saeta Yield, S.A., a leading, publicly-listed European owner and operator of wind and solar assets, located primarily in Spain. TerraForm Power has secured irrevocable commitments from shareholders, who together own more than a 50% interest, to tender their shares in Saeta under the offer. TerraForm Power's offer is EUR12.20 in cash per share of Saeta. The aggregate value of the irrevocable commitments, representing more than a 50% interest in Saeta, is approximately $600M. If TerraForm Power successfully acquires all of the remaining Saeta shares in the tender offer, the total purchase price will be approximately $1.2B. Due to the accretion of the transaction, TerraForm Power has increased its dividend to 76c per share (on an annual basis), a 6% increase over its previous target of 72c per share, and reconfirms its dividend growth target of 5-8% per annum. Prior to funding the transaction, TerraForm Power has over $1B of liquidity under committed facilities, including $500M under its corporate credit facility, which has been upsized to $600 million, and $500M under the sponsor line with Brookfield. Assuming a $1.2B purchase price, TerraForm Power intends to execute a funding plan comprised of the following sources: A $400M equity offering, which Brookfield has agreed to backstop in order to provide a minimum issuance price equal to TerraForm Power's 5-day VWAP immediately prior to announcement of the transaction; The remaining $800M will be financed with available liquidity, which TerraForm Power intends to refinance with a combination of project financings of its unencumbered assets and cash to be released from Saeta's assets. The tender offer is expected to be completed in the second quarter of 2018, subject to certain closing conditions including obtaining regulatory approvals. TerraForm Power will be able to acquire 100% of the shares of Saeta provided that at least 90% of the shares are tendered in the offer. The transaction has been approved by the Board of Directors of TerraForm Power.