In an effort to grow its business and create shareholder value, San Francisco-based Pattern Energy has agreed to acquire two wind projects from Pattern Development for $202.4 million.
According to Pattern Energy Group, which went public in September, the acquisitions were funded from available cash and credit facilities. Upon closing, the deals will add 214 MW of installed capacity to Pattern Energy's portfolio.
‘These acquisitions that have been acquired at attractive prices will add 21% to our assets under management and will grow our expected cash available for distribution in 2014 and beyond,’ says Mike Garland, president/CEO at Pattern Energy. ‘They are designed to provide accretive, stable and sustainable cash flows and are the first in what we believe will be a series of acquisitions from the portfolio owned by Pattern Development that support the growth plan we previously outlined during the IPO process."
The transaction includes Grand Renewable, a 149 MW project located in Haldimand County, Ontario. According to Pattern, the Grand Renewable project has characteristics similar to its South Kent wind project but with a slightly higher power purchase agreement price and a slightly lower net capacity factor. The project is scheduled to reach commercial operation in the fourth quarter of 2014.
Pattern also acquired the 182 MW Panhandle 2, which is currently under construction in Carson County, Texas. According to Pattern, approximately 80% of the expected output is contracted under a long-term energy price hedge with an affiliate of Morgan Stanley, with the balance paid at ERCOT's spot market prices. Pattern notes that the Panhandle 2 project has strong, consistent wind with an expected net capacity factor that is slightly higher than 50%.
Both projects will be powered with Siemens wind turbines.