SunEdison’s TerraForm Global Raises $675 Million in IPO

TerraForm Global Inc., formed by SunEdison Inc. to acquire renewable-energy assets in emerging markets, raised $675 million in its initial public offering, pricing a reduced number of shares below the original range.

The company sold 45 million shares for $15 each, according to data compiled by Bloomberg. TerraForm amended its terms in a regulatory filing Friday, after initially saying it planned to offer 56.6 million shares for $19 to $21 each. The shares will be listed on the Nasdaq Stock Market under the symbol GLBL.

TerraForm Global will provide a dividend to stockholders through cash-flows from power plants. It has solar and wind projects in China, India and South Africa, as well as other countries in South America and Southeast Asia. TerraForm Global’s projects have a combined capacity of 1,406 megawatts, the prospectus shows.

The Bethesda, Maryland-based company predicts that its projects will produce $231.5 million in cash available for distribution in 2016, the filing shows. TerraForm generated $39.4 million in revenue last year, almost double that in 2013, the filing shows.

Concurrent with the IPO, TerraForm conducted a $67.5 million private placement with Baron Funds and Zimmer Partners. TerraForm Global plans to use the proceeds from the offering and private placement to repay debt and fund pending acquisitions.

The company’s offering includes Class A common stock and Class B common stock. All Class B common stock will be bought by SunEdison Inc., giving them 100 votes per share. A share of Class A common stock gives the shareholder one vote.

JPMorgan Chase & Co, Barclays Plc, Citigroup Inc. and Morgan Stanley are managing the offering.

Second Yieldco

This is the second so-called yieldco formed by SunEdison, the world’s biggest clean-energy developer, after TerraForm Power Inc.

This model is becoming increasingly common in the renewable energy industry. Developers always need capital for new projects, so they create a separate, publicly traded unit to buy the assets once they’re completed. The yieldco’s function is to collect revenue from selling electricity, helping fund the purchase of more power plants.

The first TerraForm, which sold shares through an IPO in July 2014, owns mainly power plants in the U.S. and other developed nations.