Pattern Energy Group (NASDAQ:PEGI) (TSX:PEG) said April 6 that it has entered into definitive agreements to acquire three wind power facilities that will add 360 MW of owned capacity to Pattern Energy’s portfolio – an increase of 22%.
San Francisco-based Pattern has reached agreement with Wind Capital Group to acquire two operational wind power facilities. The company has also agreed to acquire the K2 Wind facility from Pattern Energy Group LP (Pattern Development).
Missouri-based Wind Capital Group is part of NTR plc, an international renewables investment group.
Upon closing, the acquisition of these three wind power facilities will add 360 MW of owned capacity to Pattern Energy’s portfolio, growing the portfolio to 15 wind power facilities with a total owned interest of 1,996 MW.
Pattern is acquiring the wind operations for a total combined equity purchase price of $372m together with the assumption of $320m in net debt and certain tax equity non-controlling interests.
Pattern Energy has entered into agreements with WCG to acquire two operational wind power facilities totaling 350 MW from WCG and its affiliates for a purchase price of $244m plus assumed net debt of $102 million.
The acquisition includes ownership interests in the 200 MW Post Rock Wind facility in Kansas, which uses 134 1.5 MW General Electric (NYSE:GE) turbines and the 150 MW Lost Creek Wind facility in Missouri which uses 100 1.5 MW GE turbines. Pattern Energy expects to acquire a total combined owned interest of 270 MW in these two facilities.
Post Rock Wind and Lost Creek Wind, which have been operational for an average of approximately three years, are fully contracted under power purchase agreements with highly credit-worthy counterparties. The Post Rock Wind facility in Kansas has a long-term contract with Westar Energy (NYSE:WR), which has a BBB+ credit rating. The Lost Creek Wind facility in Missouri has a long-term contract with Associated Electric Cooperative Incorporated, which has an AA credit rating. The average remaining life of the contracts is 17 years.
The WCG transactions are expected to close within 60-to-90 days, subject to receipt of certain regulatory approvals and satisfaction or waiver of other customary conditions.
Pattern Energy also entered into an agreement to acquire an owned interest of 90 MW in the K2 Wind power facility from Pattern Development for a purchase price of $128m plus assumed estimated proportionate debt at term conversion of $218m U.S. dollar equivalent. Pattern Energy will hold a 33% equity interest in the facility, which is equally co-owned by Samsung Renewable Energy and Capital Power LP. K2 Wind, a 270 MW project located in Ontario, Canada, is expected to reach commercial operation in the second quarter of 2015. The facility has a 20-year power purchase agreement with the Independent Electricity System Operator (IESO) and uses 140 2.3 MW Siemens turbines, the same turbines used at Pattern Energy’s operating facilities in Ontario.
The Conflicts Committee of the Board of Directors of Pattern Energy, which is comprised entirely of independent directors, reviewed and recommended the terms of the K2 Wind acquisition to the Board. The Committee was advised on financial matters by Evercore Group, which also provided fairness opinion, and on legal matters by Davis Polk & Wardwell.
The acquisitions expand Pattern Energy’s operations into two Kansas and Missouri, and increase the company’s presence in Ontario.
Pattern Energy also said April 6 that it has increased its growth target for cash available for distribution (CAFD) per share to a compound annual growth rate (CAGR) of 12-15% for the next three years.
Pattern Energy is a leading independent power company, according to the company’s website. Pattern Development is leading global power developer with an extensive development pipeline, owns a minority stake in Pattern Energy, the publicly listed company.