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Macquarie Acquires Wind Power Assets to Diversify

Zacks Equity Research

In a concerted effort to diversify its business, infrastructure service provider Macquarie Infrastructure Company LLC (MIC) recently acquired wind power generating assets in New Mexico from BayWa r.e. Wind, LLC for $10.6 million. Headquartered in San Diego, CA, BayWa r.e. Wind, LLC is a turn-key developer and operator of renewable energy projects in North America.   

This is the first investment by Macquarie in the field of wind power generation as it aims to diversify its Contracted Power and Energy segment from solar photovoltaic business into other projects that focus on renewable and unconventional sources of energy. The facility, capable of generating 19.8 megawatts of wind power, offers a steady revenue stream to Macquarie as it has a 20-year power purchase agreement in place with an investment grade counterparty.

At the same time, the company announced that a performance fee of $5.0 million for the second quarter of 2014 will be paid to its management firm, Macquarie Infrastructure Management (USA) Inc. Performance fees are usually payable when the total return for Macquarie shareholders exceeds the benchmark index and cumulative total returns are in excess of any prior underperformance. Macquarie calculates performance fees by comparing the 15-day volume weighted average price of its shares at the end of each quarter with that of the prior quarter.

Macquarie owns and operates a diversified group of infrastructure businesses in the U.S., including a gas processing and distribution business, Hawaii Gas, several entities comprising a Contracted Power and Energy segment, and an interest in a bulk liquid storage terminal business called International-Matex Tank Terminals. The company also owns and operates an airport services business titled Atlantic Aviation.

Macquarie presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include ITT Corporation (ITT), Compass Diversified Holdings (CODI) and Carlisle Companies Incorporated (CSL), each of which carry a Zacks Rank #2 (Buy).

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