UPDATE 1-TerraForm to buy wind farms in North America for $2 bln

Mon Jul 6, 2015 6:00pm EDT
 
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July 6 (Reuters) - TerraForm Power Inc, a unit of SunEdison Inc, said it would buy 930 megawatt of wind farms in the United States and Canada from Invenergy Wind LLC for $2 billion.

The deal involves seven contracted wind farms and Invenergy will retain a 9.9 percent stake in the U.S. assets, TerraForm said on Monday.

TerraForm's shares rose 3.5 percent to $38.86 in extended trading, while SunEdison's shares rose 3.2 percent to $29.90.

TerraForm plans to buy 460 MW of plants directly from Invenergy, the largest independent wind power generation company in the United States.

The remaining 470 MW will be acquired by a new warehouse facility sponsored by SunEdison and third-party equity investors, with the assets dropping down to TerraForm in the future.

TerraForm also raised its 2016 dividend target to $1.70 per share from $1.53. The raised target represents a 26 percent increase from TerraForm's 2015 annual guidance, the company said.

TerraForm, which went public in July last year, said it expected to fund the acquisition of the 460 MW of plants through a combination of cash on hand and new bond financing.

The transaction, which is expected to be immediately accretive, is expected to close in the fourth quarter, TerraForm said.

SunEdison and TerraForm entered the U.S. wind power market in November when they agreed to buy First Wind for $2.4 billion. (Reporting by Sneha Banerjee and Tanvi Mehta in Bengaluru; Editing by Kirti Pandey)