SunEdison Inc., the best-performing U.S. solar company, raised $402.5 million to help buy renewable energy plants in emerging markets, and then purchased more than 2 gigawatts of wind and solar projects in Central America and Asia.
The company completed a $335 million private placement deal for part of its stake in TerraForm Global LLC, a unit created to own and operate power plants, according to a statement Tuesday. TerraForm Global also sold $67.5 million of shares in another private placement, a deal that’s conditional upon the completion of its planned initial public offering. Investors included General Electric Co., the biggest U.S. wind-turbine maker, which contributed $25 million.
The agreements will support TerraForm Global’s efforts to acquire wind and solar projects in markets including Latin America, Europe, India and China. SunEdison formed both TerraForm Global and a sister unit TerraForm Power Inc. to buy and hold renewable energy projects once they’re complete.
“SunEdison has a solid first-mover advantage in global project development,” said Gordon Johnson, an analyst at Wolfe Research in New York who has the equivalent of a buy rating on the shares and a $44 price target. “They’re giving investors confidence that their project pipeline will lead to future dividend growth.”
The shares gained 2.3 percent to $30.96 at the close in New York.
SunEdison’s financing deals Tuesday were matched by the acquisition of two renewable energy developers, in Central America and Asia.
The company agreed to buy the Central American developer Globeleq Mesoamerica Energy, which owns 325 megawatts of operating wind and solar farms and another 326 megawatts of projects in development or under construction. SunEdison said the purchase will make it the biggest renewable-energy developer in the region.
It also will buy Singapore-based Continuum Wind Energy Ltd., which owns 242 megawatts of wind farms in India, and more than 1.1 gigawatts of projects under development or in construction in the country.
The deals are expected to close in the third quarter and SunEdison expects to place the power plants into TerraForm Global. SunEdison didn’t provide prices for the purchases.
GE, Capricorn Investment Group and Glenview Capital Management were among the participants in the $402.5 million investment.
“This investment is about driving continued global growth for renewable power,” Anne McEntee, chief executive officer of GE’s renewables business, said in a statement. GE also agreed to provide operation and maintenance for TerraForm Global’s wind equipment around the world.
SunEdison said last month it plans to raise as much as $700 million in an initial public offering for TerraForm Global. TerraForm Power, SunEdison’s first so-called yield company, focuses mainly on U.S. power plants. It’s gained 50 percent since trading began July 17 at $25 a share.
SunEdison is the best performing U.S. stock this year on the 21-member Bloomberg Intelligence Global Large Solar Energy Index.