AES and Alberta Investment Management Corp have agreed to acquire Salt Lake City-based sPower, an owner, operator and developer of utility scale solar assets, for $853 million in cash. The seller is Fir Tree Partners. The deal is expected to close by the third quarter of 2017. Barclays served as the lead financial adviser to sPower on the transaction while CohnReznick Capital Markets Securities, Marathon Capital and Citi served as co-advisers.
ARLINGTON, Va.–(BUSINESS WIRE)–The AES Corporation (NYSE: AES) and Alberta Investment Management Corporation (AIMCo), on behalf of certain of its clients, have agreed to acquire FTP Power LLC (sPower), the largest independent owner, operator and developer of utility scale solar assets in the United States, from Fir Tree Partners and its minority owners, for $853 million in cash, plus the assumption of $724 million in non-recourse debt. In connection with the transaction, AES and AIMCo will each directly and independently purchase and own slightly below 50% equity interests in sPower.
sPower, a Fir Tree portfolio company that the firm capitalized in 2014, owns and operates utility and commercial distributed electrical generation systems across the United States. The sPower portfolio includes 1,274 MW of solar and wind projects in operation or under construction and a development pipeline of more than 10,000 MW located in the United States. The operating assets and projects under construction are under long-term Power Purchase Agreements (PPA) with an average remaining life of 21 years. The offtakers under the PPAs have an average credit rating of A1. After closing, AES’ ownership of renewable energy projects in operation and under construction will grow from 8,278 MW to 9,552 MW, including hydro, wind, solar and energy storage.
“We are very pleased to acquire sPower, the largest independent solar developer in the United States. sPower not only brings 1.3 GW of installed capacity with an average remaining contract life of more than 20 years, but a first class management and development team with a pipeline of more than 10 GW of projects,” said Andrés Gluski, AES President and Chief Executive Officer.
“AIMCo is excited to acquire an approximate 50% interest in sPower, on behalf of our clients and consistent with our investment mandate, and in partnership with AES,” stated Kevin Uebelein, Chief Executive Officer of AIMCo. “sPower is an impressive organization that has and continues to successfully develop and execute a robust renewable energy development pipeline, delivering value to all of its many stakeholders. Our partner, AES, is a world class leader in sustainable energy and we are delighted to be working with them.”
“It is extremely rewarding to realize Fir Tree’s vision for sPower with this agreement between our company and AES and AIMCo,” said Jeffrey Tannenbaum, Chairman of the Board of sPower and founder of Fir Tree Partners. “sPower’s innovation and significant commercial success in just three years is testament to its outstanding management team and demonstrates that clean energy is a strong and profitable tool for driving economic growth and meaningful job creation for skilled workers. Clean energy is the future and the opportunity ahead for sPower is very large. We believe AES and AIMCo are the right partners to support the company’s continued evolution and ambitious goals for clean energy development, job creation, and greenhouse gas reductions.”
Ryan Creamer, Chief Executive Officer of sPower, said, “With the help of Fir Tree, we have experienced incredible growth over the last three years. We are excited to become part of the AES/AIMCo partnership and we are confident that it positions us to continue to grow, develop and maximize the platform that we have created. On behalf of the entire sPower team, I want to thank Fir Tree for its support and vision that have been so critical to our success.”
This transaction is expected to close by the third quarter of 2017, subject to review or approval by the Federal Energy Regulatory Commission, the Committee on Foreign Investment in the United States and the expiration or termination of any waiting period under the Hart-Scott-Rodino Act. The acquisition price is subject to customary post-signing purchase price adjustments.
AES will provide its 2017 guidance and longer-term expectations, and discuss this transaction on its fourth quarter and full year 2016 financial review call on February 27, 2017.
The AES Corporation (NYSE: AES) is a Fortune 200 global power company. We provide affordable, sustainable energy to 17 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce of 21,000 people is committed to operational excellence and meeting the world’s changing power needs. Our 2015 revenues were $15 billion and we own and manage $37 billion in total assets. To learn more, please visit www.aes.com. Follow AES on Twitter @TheAESCorp.
AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $95 billion of assets under management. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 31 pension, endowment and government funds in the Province of Alberta. For more information on AIMCo please visit www.aimco.alberta.ca.
Headquartered in Salt Lake City, with offices in San Francisco, Long Beach and New York City, sPower is the largest private owner of operating solar assets in the United States. sPower owns and operates utility and commercial distributed electrical generation systems across the U.S. producing in excess of 1.1 GW of power. Additionally, sPower has an in-construction and development pipeline in excess of 10 GW. For more information on sPower, please visit www.spower.com.
About Fir Tree Partners
Fir Tree, founded in 1994, is a private investment firm with approximately $10 billion of capital under management. The firm invests worldwide in public and private companies, real estate, and debt. Fir Tree manages assets on behalf of leading endowments, foundations, pension funds, and sovereign wealth funds. The firm maintains offices in New York and Miami.