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LONDON, UK / ACCESSWIRE / February 27, 2017 / Active Wall St. blog coverage looks at the headline from Arlington, Virginia based The AES Corp. (NYSE: AES) as the sustainable power Company announced along with Canada's Institutional Investment Managers, Alberta Investment Management Corporation (AIMCo), on behalf of some of its clients, announced the acquisition of FTP Power LLC (sPower) on February 24, 2017. sPower is being acquired from private equity firm Fir Tree Partners. The cash cum debt transaction is valued at approximately $1.577 billion. Register with us now for your free membership and blog access at:
One of AES Corp.'s competitors within the Electric Utilities space, Duke Energy Corp. (NYSE: DUK), reported Q4 and full-year 2016 financial results. AWS will be initiating a research report on Duke Energy in the coming days.
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AES Corp. is a Fortune 200 global power Company with generation and distribution businesses and provides affordable and sustainable energy in 17 countries. It has a workforce of over 21,000 people worldwide. AES Corp. owns and manages $37 billion in total assets and the revenues generated in 2015 were about $15 billion.
Established in January 2008, AIMCo is a Canada based institutional investment manager with assets under management (AUM) exceeding $95 billion. It manages investments of 26 pension, endowment, and government funds in Alberta.
New York based private investment firm Fir Tree Partners was founded in 1994 and manages assets on behalf of leading endowments, foundations, pension funds, and sovereign wealth funds, and the firm also invests in public and private Companies, real estate, and sovereign debt.
Finer details of the transaction
AES and AIMCo acquired the sPower from private investment firm Fir Tree Partners and its minority shareholders. AES and AIMCo have agreed to pay $853 million in cash as well as take over sPower's $724 million in non-recourse debt. The price of acquisition is subject to change based on the usual post-signing purchase price adjustments. AES and AIMCo will each independently own approximately less than 50% stake in sPower, after the acquisition. Both Companies will also independently finance this acquisition.
The transaction is expected to close in Q3 2017 and is subject to approvals from the Federal Energy Regulatory Commission, the Committee on Foreign Investment in the United States and other closing conditions.
AES has indicated that the complete details of this acquisition will be disclosed in broader detail when it announces its Q4 2016 and FY16 results and guidance for FY17, on February 27, 2017.
Once the acquisition is complete, AES' portfolio of renewable energy projects (including both operational and under construction) will increase from 8,278MW to 9,552MW. The projects are a combination of hydro, wind, solar power as well as energy storage capacities. Interestingly, in August 2016, the subsidiary of AES - AES Energy Storage signed contracts with utility San Diego Gas and Electric (SDG&E) to install two energy storage arrays with a combined capacity of 37.5MW, in what will be one of the largest battery-based energy storage project in the US.
Words from the concerned parties
Commenting on the acquisition of sPower, Andrés Gluski, President and CEO of AES Corp. said:
"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."
Kevin Uebelein, CEO of AIMCo added:
"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."
Sharing his views on the matter, Jeffrey Tannenbaum, Chairman of the Board of sPower and founder of Fir Tree Partners said:
"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."
sPower is an independent power producer which is headquartered in Salt Lake City with offices in San Francisco, Long Beach and New York City. sPower develops and owns over 150+ utility-scale and commercial distributed electrical generation systems across the US and UK. However most of its utility – scale power projects are concentrated in in California and North Carolina and its distributed generation projects are concentrated in North East states or California.
At the closing bell, on Friday, February 24, 2017, AES Corp.'s stock climbed 1.53%, ending the trading session at $11.93. A total volume of 6.32 million shares were traded at the end of the day, which was higher than the 3-month average volume of 5.15 million shares. In the last month and previous twelve months, shares of the Company have advanced 6.04% and 24.37%, respectively. Moreover, the stock gained 3.76% since the start of the year. The Company's shares are trading at a PE ratio of 63.80 and have a dividend yield of 4.02%. AES' stock has a market capital of $7.86 billion.
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