Weather Guard Lightning Tech

Eolus Vind’s recent acquisition is the Deal of the Year

We discuss several recent deals in the renewables industry, including Eolus Vind’s agreement to acquire 2.3GW of Finnish wind and solar projects from YIT Energy for a bargain price of 25 million euros. Phil Totaro and Joel Saxum analyze the surprisingly low price tag and discuss other renewable energy M&A activity and financing challenges. French developer Akuo Energy fails to sell itself and decides to self-fund projects amidst high rates. Japanese infrastructure company Infroneer Holdings is also acquiring 293 wind turbines from Bain Capital’s Japan Wind Development for $1.4 billion, expanding its renewable footprint.

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Allen Hall: I’m Allen Hall, president of Weather Guard Lightning Tech, and I’m here with the founder and CEO of IntelStor, Phil Totaro, and the chief commercial officer of Weather Guard, Joel Saxum, and this is your News Flash. News Flash is brought to you by our friends at IntelStor. If you need actionable information about renewable projects or technologies Check out Intelstor intelstor.com.

Swedish wind power company Eolus Vind has signed an agreement to acquire Finnish renewable energy developer YIT Energy. The acquisition includes 2. 3 gigawatts of wind and solar projects at various stages of development and a team of 16 employees. Eolus will pay 25 million euros for the transaction, 10 million of it due at closing and the rest of installments through 2025.

Of the 2. 3 gigawatt folio, 1. 1 gigawatts are mature projects, 900 megawatts wind and 200 megawatts solar. The other 1. 2 gigawatts are earlier stage projects. Phil, 25 million euros for this seems like a really small amount. Is there more behind the scenes here?

Phil Totaro: No, this is probably like the deal of the year.

Joel Saxum: Yeah, it’s cheap!

Phil Totaro: Yeah, exactly, Joel. This is like dirt cheap for a pretty decent pipeline, especially considering Just the 1. 1 gigawatts of mature projects alone. Normally, you spend, a at least, if you’re gonna make this type of an acquisition, you at least acquire inclusive of all the development costs to date, plus, whatever, 25, 35%, whatever, is your markup on top of that.

This seems like that’s all they’re paying. They’re paying like the bare bones minimum, if they’ve already gotten any capital together, then, it’s not coming along with the deal. it’s gonna be Eolus’ responsibility to, to take care of that. Yeah this is, like I said, I’d nominate this for, the deal of the year.

That, that’s a bargain.

Joel Saxum: This sounds like a deal,if you had a buddy who was getting a divorce and his house was cheap and you could pick it up or something. heh. Something’s going on here that we’re not seeing in the news.

Allen Hall: French renewable energy developer Akuo Energy ended talks to sell itself and is now working to revive projects.

Akuo needed funding to accelerate solar and wind projects in Europe and the U. S. after construction slowed this year from cost pressures. Phil, this is another interesting one because I thought Akuo had a good set of a portfolio that people would be interested in, but evidently the interest rates in the market environment have really slowed down some of these acquisitions.

So Akuo has decided to go do the projects themselves.

Phil Totaro: Which is interesting because, if their Interest rates are supposedly high enough where they can’t find a buyer, but they are gonna be able to go out themselves and find capital that does raise a bit of a question. But I mean if they are gonna be able to get capital together to revive some of these projects that were you know earlier stage or they had paused in anticipation of a sale to a new owner, that was going to pursue, the deals through financial completion and then construction.

I guess this is a good sign for them. A bit disappointing that again, considering how long they were on the market, they didn’t find a buyer, but again, if they’re able to go out in the capital markets and get the cash together to build some of this capacity. good on them.

Joel Saxum: It’s odd that they couldn’t find a buyer because it basically it seems like anybody that’s up for sale in the renewable energy industry is getting picked.

You can at least enter into a conversation where there’s some negotiation to get to a final price, or, some final terms of some sort. So that they couldn’t find that even though they have a global portfolio, right? They’ve got some in the, they’ve got some in the U. S., of course, some capacity in the E. U. The only thing I can think of, and this is from a conversation I had in the background, may not be in, as of interest, but French employment contracts would scare me. So maybe people, maybe you’re losing some investors simply because of that.

Allen Hall: Japanese infrastructure company Infroneer Holdings is acquiring Japan wind development from Bain Capital for about 1.

4 billion dollars. The acquisition expands Infroneer renewable energy business. Japan Wind Development operates 293 wind turbines in Japan. The deal is set to close late January after a competitive bidding process. Phil, 1. 4 billion dollars, that seems about right for these assets. This is a big deal in Japan.

Phil Totaro: Yeah, and it’s interesting because this company’s already had, some, project work and some involvement in Japan, through their kind of EPC business. But this is getting them further upstream into the project development process and certainly asset ownership and operations. So it’s a big shift in terms of the pattern for them, but it’s also providing, a bit of good news for Japan wind development, which was sadly caught up in a bribery scandal with a Japanese government official recently.

So overall, I think this is, it’s a good thing, to see, and certainly the it’s a number that Bain Capital’s gonna be happy with.

Eolus Vind’s recent acquisition is the Deal of the Year