Terra Firma mulls deal as yieldcos splurge

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Richard Heap
May 4, 2015
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Terra Firma mulls deal as yieldcos splurge

Guy Hands last month said a Labour coalition with the Scottish National Party would be the best UK election result for the wind industry. The founder of private equity firm Terra Firma said he wanted a change from the negative attitude of the Conservatives.

Hands will not have to wait long to see if he gets his wish. The election is this Thursday.

But a series of recent news stories has got us wondering whether Hands’s own attitude to wind is changing too. Terra Firma has been an enthusiastic backer of renewables through investments in UK developer Infinis, US developer EverPower, and solar firm RTR.

Now, though, it is reportedly working with Bank of America Merrill Lynch on a potential sale of EverPower for $1.5bn; and six months ago said it was looking at selling its 69% stake in Infinis. It also fell short of a planned first close for its $2bn renewables fund in 2014.

So do these stories suggest Terra Firma is going cold on the renewables sector? Well, no.

The firm told A Word About Wind it could not comment on these stories or its strategy. In our view, though, a sale of EverPower or Infinis would be driven by good business sense.

Let’s start with that $2bn fund, which has faced problems including the loss of managing director Damian Darragh last February; and missed that planned close in December. The fund has struggled to buy assets due to competition from yieldcos, which target lower returns than Terra Firma and can therefore outbid Hands and co.

This competition from yieldcos has been a problem for Terra Firma’s fund, but also means it is a good time to look at a sale of EverPower, which it bought for $350m in 2009.

This developer have seven wind farms totalling 752MW, and a pipeline of 20 projects totalling 2GW. That is a portfolio that would make any yieldco drool, and therefore it is a good time to explore a potential sale. Demand is there so it makes good business sense.

Another alternative would be to sell EverPower to a solar developer keen to branch out of solar, like with SunEdison’s $2.4bn buyout of First Wind that concluded this year. We would expect SunEdison’s solar rivals to be looking at ways to take on this new giant.

The risk is that huge demand for assets from yieldcos, particularly in the US, could push out some major investors out of the market — albeit sending them away with a big payday.

And Infinis? Well, the drivers there are very different.

Hands is concerned that a new Conservative government could stall growth in the UK wind sector is it carries out its plan to block subsidies for new onshore wind subsidies after this week’s election. In that context, it would make sense for Terra Firma to sell its 69% stake if the Conservatives win.

There is no indication at this stage that Terra Firma is turning away from renewables. We have two separate stories and should be wary about conjuring up links that do not exist.

Guy Hands last month said a Labour coalition with the Scottish National Party would be the best UK election result for the wind industry. The founder of private equity firm Terra Firma said he wanted a change from the negative attitude of the Conservatives.

Hands will not have to wait long to see if he gets his wish. The election is this Thursday.

But a series of recent news stories has got us wondering whether Hands’s own attitude to wind is changing too. Terra Firma has been an enthusiastic backer of renewables through investments in UK developer Infinis, US developer EverPower, and solar firm RTR.

Now, though, it is reportedly working with Bank of America Merrill Lynch on a potential sale of EverPower for $1.5bn; and six months ago said it was looking at selling its 69% stake in Infinis. It also fell short of a planned first close for its $2bn renewables fund in 2014.

So do these stories suggest Terra Firma is going cold on the renewables sector? Well, no.

The firm told A Word About Wind it could not comment on these stories or its strategy. In our view, though, a sale of EverPower or Infinis would be driven by good business sense.

Let’s start with that $2bn fund, which has faced problems including the loss of managing director Damian Darragh last February; and missed that planned close in December. The fund has struggled to buy assets due to competition from yieldcos, which target lower returns than Terra Firma and can therefore outbid Hands and co.

This competition from yieldcos has been a problem for Terra Firma’s fund, but also means it is a good time to look at a sale of EverPower, which it bought for $350m in 2009.

This developer have seven wind farms totalling 752MW, and a pipeline of 20 projects totalling 2GW. That is a portfolio that would make any yieldco drool, and therefore it is a good time to explore a potential sale. Demand is there so it makes good business sense.

Another alternative would be to sell EverPower to a solar developer keen to branch out of solar, like with SunEdison’s $2.4bn buyout of First Wind that concluded this year. We would expect SunEdison’s solar rivals to be looking at ways to take on this new giant.

The risk is that huge demand for assets from yieldcos, particularly in the US, could push out some major investors out of the market — albeit sending them away with a big payday.

And Infinis? Well, the drivers there are very different.

Hands is concerned that a new Conservative government could stall growth in the UK wind sector is it carries out its plan to block subsidies for new onshore wind subsidies after this week’s election. In that context, it would make sense for Terra Firma to sell its 69% stake if the Conservatives win.

There is no indication at this stage that Terra Firma is turning away from renewables. We have two separate stories and should be wary about conjuring up links that do not exist.

Guy Hands last month said a Labour coalition with the Scottish National Party would be the best UK election result for the wind industry. The founder of private equity firm Terra Firma said he wanted a change from the negative attitude of the Conservatives.

Hands will not have to wait long to see if he gets his wish. The election is this Thursday.

But a series of recent news stories has got us wondering whether Hands’s own attitude to wind is changing too. Terra Firma has been an enthusiastic backer of renewables through investments in UK developer Infinis, US developer EverPower, and solar firm RTR.

Now, though, it is reportedly working with Bank of America Merrill Lynch on a potential sale of EverPower for $1.5bn; and six months ago said it was looking at selling its 69% stake in Infinis. It also fell short of a planned first close for its $2bn renewables fund in 2014.

So do these stories suggest Terra Firma is going cold on the renewables sector? Well, no.

The firm told A Word About Wind it could not comment on these stories or its strategy. In our view, though, a sale of EverPower or Infinis would be driven by good business sense.

Let’s start with that $2bn fund, which has faced problems including the loss of managing director Damian Darragh last February; and missed that planned close in December. The fund has struggled to buy assets due to competition from yieldcos, which target lower returns than Terra Firma and can therefore outbid Hands and co.

This competition from yieldcos has been a problem for Terra Firma’s fund, but also means it is a good time to look at a sale of EverPower, which it bought for $350m in 2009.

This developer have seven wind farms totalling 752MW, and a pipeline of 20 projects totalling 2GW. That is a portfolio that would make any yieldco drool, and therefore it is a good time to explore a potential sale. Demand is there so it makes good business sense.

Another alternative would be to sell EverPower to a solar developer keen to branch out of solar, like with SunEdison’s $2.4bn buyout of First Wind that concluded this year. We would expect SunEdison’s solar rivals to be looking at ways to take on this new giant.

The risk is that huge demand for assets from yieldcos, particularly in the US, could push out some major investors out of the market — albeit sending them away with a big payday.

And Infinis? Well, the drivers there are very different.

Hands is concerned that a new Conservative government could stall growth in the UK wind sector is it carries out its plan to block subsidies for new onshore wind subsidies after this week’s election. In that context, it would make sense for Terra Firma to sell its 69% stake if the Conservatives win.

There is no indication at this stage that Terra Firma is turning away from renewables. We have two separate stories and should be wary about conjuring up links that do not exist.

Guy Hands last month said a Labour coalition with the Scottish National Party would be the best UK election result for the wind industry. The founder of private equity firm Terra Firma said he wanted a change from the negative attitude of the Conservatives.

Hands will not have to wait long to see if he gets his wish. The election is this Thursday.

But a series of recent news stories has got us wondering whether Hands’s own attitude to wind is changing too. Terra Firma has been an enthusiastic backer of renewables through investments in UK developer Infinis, US developer EverPower, and solar firm RTR.

Now, though, it is reportedly working with Bank of America Merrill Lynch on a potential sale of EverPower for $1.5bn; and six months ago said it was looking at selling its 69% stake in Infinis. It also fell short of a planned first close for its $2bn renewables fund in 2014.

So do these stories suggest Terra Firma is going cold on the renewables sector? Well, no.

The firm told A Word About Wind it could not comment on these stories or its strategy. In our view, though, a sale of EverPower or Infinis would be driven by good business sense.

Let’s start with that $2bn fund, which has faced problems including the loss of managing director Damian Darragh last February; and missed that planned close in December. The fund has struggled to buy assets due to competition from yieldcos, which target lower returns than Terra Firma and can therefore outbid Hands and co.

This competition from yieldcos has been a problem for Terra Firma’s fund, but also means it is a good time to look at a sale of EverPower, which it bought for $350m in 2009.

This developer have seven wind farms totalling 752MW, and a pipeline of 20 projects totalling 2GW. That is a portfolio that would make any yieldco drool, and therefore it is a good time to explore a potential sale. Demand is there so it makes good business sense.

Another alternative would be to sell EverPower to a solar developer keen to branch out of solar, like with SunEdison’s $2.4bn buyout of First Wind that concluded this year. We would expect SunEdison’s solar rivals to be looking at ways to take on this new giant.

The risk is that huge demand for assets from yieldcos, particularly in the US, could push out some major investors out of the market — albeit sending them away with a big payday.

And Infinis? Well, the drivers there are very different.

Hands is concerned that a new Conservative government could stall growth in the UK wind sector is it carries out its plan to block subsidies for new onshore wind subsidies after this week’s election. In that context, it would make sense for Terra Firma to sell its 69% stake if the Conservatives win.

There is no indication at this stage that Terra Firma is turning away from renewables. We have two separate stories and should be wary about conjuring up links that do not exist.

Guy Hands last month said a Labour coalition with the Scottish National Party would be the best UK election result for the wind industry. The founder of private equity firm Terra Firma said he wanted a change from the negative attitude of the Conservatives.

Hands will not have to wait long to see if he gets his wish. The election is this Thursday.

But a series of recent news stories has got us wondering whether Hands’s own attitude to wind is changing too. Terra Firma has been an enthusiastic backer of renewables through investments in UK developer Infinis, US developer EverPower, and solar firm RTR.

Now, though, it is reportedly working with Bank of America Merrill Lynch on a potential sale of EverPower for $1.5bn; and six months ago said it was looking at selling its 69% stake in Infinis. It also fell short of a planned first close for its $2bn renewables fund in 2014.

So do these stories suggest Terra Firma is going cold on the renewables sector? Well, no.

The firm told A Word About Wind it could not comment on these stories or its strategy. In our view, though, a sale of EverPower or Infinis would be driven by good business sense.

Let’s start with that $2bn fund, which has faced problems including the loss of managing director Damian Darragh last February; and missed that planned close in December. The fund has struggled to buy assets due to competition from yieldcos, which target lower returns than Terra Firma and can therefore outbid Hands and co.

This competition from yieldcos has been a problem for Terra Firma’s fund, but also means it is a good time to look at a sale of EverPower, which it bought for $350m in 2009.

This developer have seven wind farms totalling 752MW, and a pipeline of 20 projects totalling 2GW. That is a portfolio that would make any yieldco drool, and therefore it is a good time to explore a potential sale. Demand is there so it makes good business sense.

Another alternative would be to sell EverPower to a solar developer keen to branch out of solar, like with SunEdison’s $2.4bn buyout of First Wind that concluded this year. We would expect SunEdison’s solar rivals to be looking at ways to take on this new giant.

The risk is that huge demand for assets from yieldcos, particularly in the US, could push out some major investors out of the market — albeit sending them away with a big payday.

And Infinis? Well, the drivers there are very different.

Hands is concerned that a new Conservative government could stall growth in the UK wind sector is it carries out its plan to block subsidies for new onshore wind subsidies after this week’s election. In that context, it would make sense for Terra Firma to sell its 69% stake if the Conservatives win.

There is no indication at this stage that Terra Firma is turning away from renewables. We have two separate stories and should be wary about conjuring up links that do not exist.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.