8point3 (CAFD) To Acquire Interest In 300MW Solar Project
Zacks Investment Research | Nov 14, 2016 08:43PM ET
8point3 Energy Partners LP (NASDAQ:CAFD) has signed an agreement to acquire a 34% interest in First Solar Inc.’s (NASDAQ:FSLR) 300-megawatt (“MW”) Stateline solar project located in San Bernardino County.
Details of the Transaction
8point3 Energy will purchase the project for $329.5 million. The transaction is dependent on customary closing conditions and is expected to close on Dec 1, 2016.
The partnership will finance the stake purchase through a combination of cash on hand, a promissory note and borrowings under its existing credit facility.
The stake purchase in the solar project is expected to generate about $32 million in average annual pre-tax cash flow.
The Stateline solar project, the majority of which is owned by Southern Company (NYSE:SO) , started operating in Aug 2016. Power generated by the project is purchased by Southern California Edison, a unit of Edison International (NYSE:EIX) , under a 20-year power purchase agreement (“PPA”).
8point3 Energy’s Take on the Deal
8point3 Energy is a limited partnership formed by two major solar companies – First Solar and SunPower Corporation (NASDAQ:SPWR) – in a bid to own and operate a portfolio of select solar energy generation assets primarily in the U.S. The sponsors of the partnership intermittently drop down assets to the partnership.
The CEO of 8point3 Energy, Chuck Boynton, believes the recent acquisition is in line with its long-term strategy of acquiring high-quality solar projects from its sponsors. With the addition of First Solar's 34% minority interest in Stateline project, 8point3 Energy’s diversified portfolio will hold interests in 937 MW of solar projects.
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