SunEdison Inc Stock Trading Higher On First Wind Acquisition

SunEdison Inc (NYSE:SUNE) is trading higher after the company and TerraForm Power Inc (NASDAQ:TERP) agreed to acquire First Wind.

The stock price of SunEdison Inc (NYSE:SUNE) was up almost 24% to $20.55 per share at the time of this writing around 11:31 A.M. in New York.  The company is a global developer of solar power.

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The shares of TerraForm Power Inc (NASDAQ:TERP) also surged more than 26% to $32.77 per share. The company owns and operates renewable power plants worldwide.

Transaction details

SunEdison Inc (NYSE:SUNE) and TerraForm Power Inc (NASDAQ:TERP) agreed to purchase First Wind, one of the leading developers, owners, and operators of wind projects in the United States for $2.4 billion.

SunEdison Inc (NYSE:SUNE) will acquire more than 1.6 GW of pipeline and backlog projects, which have been added to the call right project list of TerraForm Inc (NASDAQ:TERP). The projects will be operational in 2016 to 2017.

The deal also included additional 6.4 GW of project development opportunities. SunEdison Inc (NYSE:SNE) expects to speed up its project development and achieve significant energies and growth opportunities by integrating First Wind’s platform into its project development and finance platform.

SunEdison Inc (NYSE:SUNE) will become the leading renewable energy development company globally following the acquisition.

According to SunEdison Inc (NYSE:SUNE), its shareholders will benefit from increased project development cash flow, asset management revenues and dividend payments from TerraForm Power Inc (NASDAQ:TERP).

The acquisition will also accelerate the timing and enhance the visibility of SunEdison’s receipt of incentive distribution rights (IDRs) from TerraForm Power. It will also increase the value of SundEdisons yieldco platform.

The deal will be accretive immediately to TerraForm Power Inc (NASDAQ:TERP). It is expected to generate $72.5 million in unlevered cash available for distribution (CAFD) next year.

TerraForm Power Inc (NASDAQ:TERP) acquires 521 MW of contracted wind generation assets from First Wind and adds 1.6 GW of call right projects. The deal increases its generation capacity operating portfolio by more than 50%.  Its call right project list with SunEdison Inc (NYSE:SUNE) will double to 3.2 GW of solar and wind projects.

SunEdison, TerraForm Power raised 2015 guidance

SunEdison Inc (NYSE:SUNE) company raised its 2015 project installation guidance to 2.1-2.3 GW from 1.6-1.8 GW.

TerraForm Power Inc (NASDAQ:TERP) raised its 2015 CAFD guidance to $214 million and dividend guidance by 44% to $1.30 per share from $0.90 per share.

The deal is subject to customary closing conditions and regulatory approvals. The companies expect to close the transaction in the first quarter of 2015.