May 5 2014
Growing its portfolio to 11 wind power projects, Pattern Energy Group Inc., today announced it has agreed to acquire 179 megawatts (MW) of owned interest in the 218 MW Panhandle 1 wind project from Pattern Energy Group LP following its completion, expected in June 2014, for a total cash consideration of US$125 million.
Acquisition Highlights
- Third acquisition in a series of anticipated transactions with Pattern Development
- Adds 179 MW – an increase of 14% – in owned capacity upon completion
- Increases owned capacity to 1,434 MW upon completion – an increase of 38% since the initial public offering
- Will help the Company meet its target of 10-12% average annual growth in cash available for distribution ("CAFD") per Class A share over the next three years Acquisition to be funded from available cash and credit facilities
"The acquisition of Panhandle 1 will grow our assets under management by 14%, to eleven projects, and will immediately increase our cash available for distribution," said Mike Garland, President and CEO of Pattern Energy. "Panhandle is one of the best wind sites in the U.S. with a strong wind resource and excellent transmission capacity. In addition, when coupled with Panhandle 2, this acquisition will increase our economies of scale in the area.
Panhandle 1 is nearly complete making it an ideal fit with our strategy of acquiring world-class wind projects with top quality equipment that generate stable and sustainable cash flows." Panhandle 1 is being built in Carson County, Texas, and consists of 118 General Electric 1.85 MW wind turbines. The acquisition is subject to customary closing conditions and is expected to close following the commencement of commercial operations in June 2014.
Following commencement of commercial operations, approximately 77% of the expected output is contracted under a 13-year energy price hedge, with an A-/Baa2 credit-rated affiliate of Citibank, with the balance paid at ERCOT's spot market prices.
Pattern Energy will pay the $125 million cash purchase price, subject to certain adjustments, to Pattern Development upon certain conditions being met, including that the project successfully reaches commercial operation. The balance of the project will be acquired from Pattern Development by two institutional tax equity investors.
The Conflicts Committee of the Board of Directors of Pattern Energy, which is comprised entirely of independent directors, approved the terms of the acquisition. The Committee was advised on financial matters by Evercore Group L.L.C., which also provided a fairness opinion, and on legal matters by Davis Polk & Wardwell LLP.
In December, Pattern Energy agreed to acquire Panhandle 2, a 181.7 MW project adjacent to Panhandle 1. Panhandle 2 will reach commercial operation in the fourth quarter of this year. Together, the two wind power projects will total 400 MW in the Texas Panhandle region.
Source: http://patternenergy.com/