BETHESDA, Md., Jan. 06, 2017 (GLOBE NEWSWIRE) -- TerraForm Power, Inc. (Nasdaq:TERP), an owner and operator of clean energy power plants, today announced that its subsidiary, TerraForm Power Operating, LLC, has entered into an agreement to sell a portfolio of 24 operating solar projects in the United Kingdom representing 365 MW to Vortex, a renewable energy platform managed by EFG Hermes’ private equity arm. The UK Portfolio is one of the largest portfolios of solar projects in the United Kingdom and was assembled by TerraForm Power in 2014 and 2015.
The transaction is valued at approximately $580 million and represents an implied multiple of approximately 16x TerraForm Power’s expected 2016 EBITDA contribution from the UK Portfolio. Operating expects to receive approximately $208 million of proceeds from the sale, net of certain transaction expenses and distributions expected to be taken from the UK Portfolio before closing, and subject to potential currency fluctuation. The Company expects to use the transaction proceeds to enhance its liquidity position and reduce its net debt. Upon completion, the Company expects to reduce non-recourse project debt on its balance sheet by approximately $370 million.
“The TerraForm Power Board and management team continues to execute on our key strategic initiatives, including fleet optimization and deleveraging, and this transaction demonstrates our progress in positioning the Company for value creation,” said Peter Blackmore, Chairman and Interim CEO of TerraForm Power. “Given the strong demand for operational United Kingdom solar plants, we are pleased to capitalize on the opportunity to monetize the high-quality portfolio of solar plants that our team has assembled and strengthened over the last two years and generate significant value for our shareholders.”
“The United Kingdom is a key contributor to Europe's solar market,” added Karim Moussa, EFG Hermes Head of Private Equity. “This Portfolio offers us an attractive entry point with a long-term investment proposition in the country. Our existing asset base in Vortex paid superior cash yields to our investors to date. We are delighted to add this high quality Portfolio to the platform and bring in the United Kingdom's premier solar developer as our technical partner.”
Vortex intends to refinance the existing non-recourse project debt facility with a new upsized facility and will enter into new contracts with Lightsource Renewable Energy, a leading service provider in the United Kingdom, for operations & maintenance and management services.
The transaction is expected to close in the first half of 2017, subject to certain conditions precedent. After close, TerraForm Power will continue to own an 11 MW operating solar plant in the United Kingdom, which it expects to divest in the future.
Citi served as exclusive financial advisor and Linklaters, LLP acted as counsel to TerraForm Power. Watson Farley & Williams acted as counsel to Vortex Solar.
About TerraForm Power
TerraForm Power is a renewable energy company that is changing how energy is generated, distributed and owned. TerraForm Power creates value for its investors by owning and operating clean energy power plants. For more information about TerraForm Power, please visit: www.terraformpower.com.
About EFG Hermes
With a current footprint spanning seven countries in the Middle East and North Africa, EFG Hermes started in Egypt and has grown over 30 years of success to become the region’s leading investment bank. Drawing on our proven track-record and a team of 865 talented employees, we provide a wide spectrum of financial services that include investment banking, asset management, securities brokerage, research and private equity to the entire region.
