Canadian Solar Inc., has entered into a definitive agreement with Sharp Corporation to acquire solar energy developer Recurrent Energy LLC, for approximately $265 million.
Once completed, the acquisition of Recurrent will increase Canadian Solar’s total solar project pipeline by approximately 4.0 GW to 8.5 GW, and its late-stage project pipeline by approximately 1.0 GW to 2.4 GW.
Located in California and Texas, Recurrent’s 1.0 GW late-stage pipeline is one of the largest utility-scale project portfolios scheduled to be built prior to the ITC expiration in 2016, and represents an estimated revenue opportunity of at least $2.3 billion for Canadian Solar under a build and sell business model.
“The acquisition of Recurrent is an important milestone for us as it significantly expands and strengthens our position in the North American market, and places Canadian Solar firmly among the leading global solar energy companies,” said Dr. Shawn Qu, Canadian Solar chairman and CEO. “By combining Canadian Solar’s global reach and experience with Recurrent’s proven solar energy development track record in the U.S. and Canada, we are significantly expanding the scale of our solar energy development platform. At the same time, this transaction broadens our strategic options to extend our business model from development and construction into potential ownership and operation of solar power plants as we work to create additional value for our shareholders.”
The transaction is expected to close prior to the end of the first quarter of 2015, subject to customary closing conditions and regulatory approvals.
The transaction further expands Canadian Solar’s position as a leading solar energy developer, with a globally diversified project pipeline in low risk geographies. In addition, this transaction broadens Canadian Solar’s project development and financing capabilities, and enhances the company’s position for creating its own Yield-Co in the quarters ahead.
“Canadian Solar is a key player in the industry and we are fortunate that our collective visions for the future of the solar market are very much aligned,” said Arno Harris, Recurrent Energy CEO. “We look forward to close collaboration with our new parent company to bring solar power further into mainstream energy markets.”
Credit Suisse acted as sole financial advisor and Foley & Lardner LLP acted as legal counsel to Canadian Solar. Scotia Capital (USA) Inc. acted as lead financial advisor to Sharp Corporation and Recurrent. The Bank of Tokyo-Mitsubishi UFJ, Ltd./MUFG Americas also acted as financial advisor to Sharp Corporation. Orrick, Herrington & Sutcliffe LLP acted as legal counsel to Sharp Corporation.