TerraForm Global Inc (NASDAQ:GLBL), a clean energy power plants operator, has reached a deal to be bought by Brookfield Asset Management Inc (NYSE:BAM). Brookfield mainly specializes in alternative asset management. Brookfield will buy off TerraForm at a total cost of around $787 million in cash and inherit a debt of around $455 million.
Following the announcement, TerraForm Global rose by more than 16% on premarket Tuesday.
The transaction has a total equity value of $1.7 billion and $1.3 billion worthy of enterprise value. After completion of the acquisition, Brookfield become TerraForm Power’s sponsor and become the majority shareholder with a 51% stake. After closing the transaction, non-Brookfield shareholders will have a 49% stake in TerraForm Power.
TerraForm Global operates, owns or is in the process of acquiring a 31 fleet solar and wind plants with a total output of 952 MW spread across India, Brazil, China, Thailand, South Africa, Uruguay and Malaysia.
As part of the terms of the agreement for the merger, Brookfield will buy all TerraForm Global’s Class A shares at a price of $5.10 for every share in cash. This will translate into a premium of around 50% of TerraForm Global’s closing share price as at September 16, 2016 for Class A shareholders. September 16, 2016 was TerraForm Global’s las trading day before its announcement of ongoing exploration of strategic channels to maximize the company’s value to shareholders.
Just before the merger and in accordance with a settlement agreement entered between SunEdison, Inc and TerraForm Global, all SunEdison, Inc Class B shares will be exchanged and TerraForm Global, LLC Class B units into 25% of all Class A shares on a diluted basis.
The deal has been approved by both TerraForm as well Brookfield boards of directors. SunEdison has also endorced the deal.
TerraForm Global disclosed entering into a settlement agreement with SunEdison regarding SunEdison’s Chapter 11 bankruptcy case. The agreement is awaiting approval by the United States bankruptcy court that is in charge of SunEdison Bankruptcy.
