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Atlantic Power in $350 Million Wind-Farm Deal With TerraForm

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Atlantic Power Corp. agreed to sell its wind farms to TerraForm Power Inc. for $350 million, giving the company a cash injection after it failed to find a buyer last year.

The five operating wind farms in Idaho and Oklahoma can produce as much as 521 megawatts of electricity and include contracts to sell their output to utilities with an average life of 18 years, Beltsville, Maryland-based TerraForm said in a statement Wednesday. TerraForm went public last year and has been acquiring power projects from its parent, renewable-energy developer SunEdison Inc., and other sellers.

Atlantic Power, owner of power plants in the U.S. and Canada, said in September it had not found a buyer or merger partner after conducting a strategic review of its options. The stock fell 22 percent last year, after declining 70 percent in the prior year.

“This transaction represents a compelling valuation for our assets and will enhance our financial strength and flexibility,” Atlantic Power Chief Executive Officer James J. Moore said in a separate statement. The shares fell 1.4 percent to $2.77 at the close in New York.

TerraForm expects the plants will generate adjusted earnings before interest, taxes, depreciation and amortization of $56 million a year on average during the next decade. It will also assume debt from the plants. TerraForm surged 4.7 percent to $38.23, a record high.

Boston-based Atlantic Power was advised by Goldman Sachs Group Inc. on the deal and Morgan Stanley advised TerraForm.

(Updates with closing share price in fifth paragraph.)
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