Renewables generator Pattern Energy confirmed Tuesday that it
has “drawn interest” from potential buyers, following a press
report that Brookfield Asset Management may be interested in
merging its TerraForm Power business with Pattern.
Such a merger would create a new renewables powerhouse with an
international footprint, fusing Pattern’s 2.9 gigawatts of mostly
wind capacity across North America and Japan with TerraForm
Power’s more technologically diversified 3.7-gigawatt portfolio
in the U.S., Europe and Latin America.
Pattern’s shares rose 7 percent on Monday afternoon after
Bloomberg first reported the talks based on unidentified
sources, and the shares continued to move northward on Tuesday
morning. At around $25.50, they are trading at their highest level
in nearly three years.
“Pattern is confirming that it has drawn interest from third
parties,” the San Francisco-based company said in a statement.
“No agreement or arrangement for any transaction has been reached
with any such third party.”
In addition to its controlling stake in TerraForm Power,
Brookfield Asset Management also owns Brookfield Renewable
Partners, which claims to be one of the world’s largest publicly
traded renewables operators with a portfolio centered on
A deal between Brookfield and Pattern would follow the ongoing
trend of M&A action for so-called renewables yieldcos.
Canada’s Brookfield Asset Management acquired SunEdison’s
yieldcos, while Global Infrastructure Partners bought NRG Yield and
renamed it Clearway Energy. Last year asset manager Capital
Dynamics acquired and delisted 8point3 Energy Partners, a yieldco
launched jointly by SunPower and First Solar.
Listed in both New York and Toronto, Pattern went public in 2013
at $22 a share amid a wave of optimism about yieldcos, and its
shares steamed upward in the months that followed. But within a few
years they had crashed back to earth as the bankruptcy of
SunEdison — which launched two yieldcos of its own — exposed
concerns about a business model that appeared to hinge on the
ability to regularly sell shares at ever-rising prices.
Pattern has spent the past several years convincing investors of
the long-term sustainability of its model, freezing its dividend
yield to lower its payout ratio and taking a far more circumspect
approach toward raising capital.
The company has sought to bring more operations and maintenance
work in-hose to save money, and placed a heavier emphasis on the
often more lucrative — if inconsistent — project-development
side of its business.
Pattern was the 11th largest owner of U.S. wind capacity at the
end of 2018, according to the American Wind Energy Association. The
company was also an early mover in the now-stalled Canadian wind
market, and has made a big push into the Japanese renewables market
in recent years, including its first foray into offshore wind
Source: FS – GreenTech Media
Pattern Energy ‘Draws Interest’ From Potential Buyers