Brookfield Asset Management Inc. (NYSE: BAM; TSX:BAM.A; EURONEXT AMSTERDAM:BAMA) has entered into a definitive agreement to acquire 51% of TerraForm Power, Inc. (NASDAQ: TERP) and will assume the role of TerraForm Power’s sponsor.
Separately Brookfield will acquire 100% TerraForm Global, Inc. (NASDAQ: GLBL) for $5.10 per share in cash (all figure in US dollars) for approximately $787 million and will assume approximately $455 million in net debt, representing an enterprise value of approximately $1.3 billion.
For each TerraForm Power Class A share and subject to proration, TerraForm Power shareholders (excluding Brookfield) will be entitled to: $11.46 in cash or $1.94 in cash and one share in TerraForm Power post-closing. Post transaction closing, non-Brookfield shareholders, will hold 49% ownership in TerraForm Power.
The transaction values TerraForm at $1.7 billion in total equity value and $6.6 billion in total enterprise value.
As part of TerraForm Power transaction, Bookfiled will provide approximately 3,500 MW Right of First Offer portfolio to TerraForm Power and $500 million sponsor equity line to support future growth for TerraForm Power.
Brookfield and TerraForm Power will enter into a Master Services Agreement whereby Brookfield will provide strategic services and long-term investment advisory services. In return, Brookfield will receive an annual management fee as well as a management incentive fee and incentive distribution rights aligning Brookfield’s incentives with TerraForm Power’s public shareholders.
The TerraForm Power and TerraForm Global transactions are expected to be completed in the second half of 2017 and is not subject to the completion of each other.
Cravath, Swaine & Moore LLP acted as legal advisors to Brookfield.
photo credit: TerraForm Power
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