Arlington, Va.-based AES Corp (NYSE: AES) and Canada’s Alberta Investment Management Corp (AIMCo) agreed to acquire FTP Power LLC (sPower), the largest independent owner, operator and developer of utility scale solar assets in the United States, from hedge fund and private equity firm Fir Tree Partners and its minority owners, for $853 million in cash, plus the assumption of $724 million in non-recourse debt.
The deal is expected to close by the third quarter of 2017, subject to regulatory approvals and customary closing conditions. At closing, AES and AIMCo will each 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 U.S. 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 U.S.
The sPower 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. sPower is headquartered in Salt Lake City, with offices in San Francisco, Long Beach and New York City.
“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.
AES is a Fortune 200 global power company, which provides sustainable energy to 17 countries through a diverse portfolio of distribution businesses and thermal and renewable generation facilities. The company generated revenues of $15 billion in 2015. It owns and manages $37 billion in total assets, and has a workforce of 21,000 people.
After the 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.
“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.”
AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $95 billion of assets under management. The firm invests globally on behalf of 31 pension, endowment and government funds in the Province of Alberta.
“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.”
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.
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.”
Barclays served as the lead financial advisor and global coordinator to sPower for the transaction. Marathon Capital, CohnReznick Capital Markets Securities and Citi also served as co-advisors to sPower.