US wind and solar operator Pattern Energy will be bought by Canada Pension Plan Investment Board (CPPIB), taken private and united with sister company Pattern Development to create a new renewables group, under the terms of a deal announced on Monday.
CPPIB – which has emerged as a major investor in renewables globally – agreed to pay $26.75 per share for Pattern Energy in a deal that gives it an enterprise value of $6.1bn, including debt.
CPPIB said if the acquisition goes through, it has reached a concurrent deal with Pattern backer Riverstone Holdings that would see Pattern Energy brought under common ownership with sister-company Pattern Development – which currently runs as a parallel entity developing projects to be acquired by its twin.
Pattern Energy operates 4.4GW of projects in the US, Canada and Japan. Pattern is notably a pioneer in the Japanese offshore wind sector where its nearshore 112MW Ishikari project is on course to enter service in 2022.
The Pattern Energy management team under CEO Mike Garland would lead the combined entity, said CPPIB.
Pattern Energy’s board confirmed earlier this year that it was considering sale options for the business, with Canada’s Brookfield linked with a deal at one stage.
Instead its compatriot CPPIB emerged from a clutch of bidders as the suitor best placed to deliver “significant, immediate and certain value to the company's shareholders”, said Pattern Energy chairman Alan Batkin.
CPPIB has made several high profile forays into renewables over recent years, including a stake in India’s ReNew Power and a joint venture with Northland Power looking at offshore wind.
Bruce Hogg , head of power and renewables at CPPIB said: "Pattern Energy is one of the most experienced renewables developers in North America and Japan with a high-quality, diversified portfolio of contracted operating assets, aligning well with CPPIB's renewable energy investment strategy and the increasing global demand for low-carbon energy.”
The acquisition is subject to regulatory and shareholder approval, and is due to complete by mid-2020.