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SunPower has signed a definitive agreement to buy European solar power plant developer SunRay Renewable Energy. SunPower will acquire SunRay from its shareholders (which includes management and Denham Capital) for a total of $277 million--$235 million in cash, and $42 million in the form of letter of credit and promissory notes, the companies said.
When the transaction closes, SunPower will add to its portfolio a photovoltaic project pipeline of more than 1.2GW, consisting of sites in various stages of development, in Italy, France, Israel, Spain, the United Kingdom, and Greece. SunRay's power plant development and project finance team consists of approximately 70 employees.
SunPower says it has sufficient cash to close the transaction and does not intend to raise equity capital to finance the acquisition. The company will provide specific financial guidance regarding the positive impacts of the transaction during its fourth-quarter and fiscal year 2009 earnings conference call in March.
The parties anticipate closing the transaction, which is subject to customary closing conditions, in the first half of 2010.
J.P. Morgan Securities acts as exclusive financial advisor to SunPower with regard to this transaction and provided a fairness opinion regarding the acquisition to its board.
Several executives from the companies involved commented about the acquisition.
Howard Wenger, president of SunPower's utilities and power plants business group, noted SunRay's "proven track record of developing bankable solar power plants in a complex environment. This acquisition is consistent with our long-term company strategy to develop a strong brand and complementary channels to market."
"SunRay's exceptional team and pipeline will add to our significant internal investment in North American power plant development," he said. "It also complements our European engineering, procurement and construction business that serves a broad range of development partners."
"SunRay has developed an impressive pipeline of utility-scale projects throughout Europe," continued Wenger. "We congratulate SunRay on receiving the 'European Solar Deal of the Year' award today from Project Finance magazine for the largest solar PV power plant financed in 2009--the 24MW Montalto power plant in Italy--which launched SunPower's relationship with SunRay.
"This acquisition further demonstrates our confidence in the Italian market and regulatory environment, and will accelerate the growth of our European and Middle Eastern power plant business."
SunRay CEO Yoram Amiga explained how his company's "experience working with SunPower on Montalto and several other power plants in Italy convinced us that SunRay will be joining the global solar technology, performance, and quality leader for solar power plants. Our combined experience globally will allow us to offer our customers reliable energy delivery at competitive prices."
"Denham has been a great partner, providing both capital and advice at an important stage in our company's development. We are pleased to have worked with them," he added.
"The SunRay Renewables team has proven itself unparalleled in its ability to develop, finance, and construct world-class solar projects," said Scott Mackin, partner in Denham Capital. "The marriage of that team with the superior technology of SunPower will create a formidable platform of new, socially and environmentally responsible and highly efficient solar PV projects in many countries around the world."
"We are delighted to have supported the initial development of SunRay's portfolio, including the initial phase of the award-winning Montalto project, the largest in Italy. This project was completed in partnership with SunPower, and we are confident that the two firms will continue to expand on their success together," he concluded.
"SunRay has a strong pipeline in Italy, with several power plants already permitted for delivery in 2010," said Gian Maria Ferrero, VP of SunPower's Europe, Middle East, and Africa utilities and power plants business unit. "Italy has demonstrated sustainable, strong growth in both rooftop and ground-mounted solar systems, bringing new jobs to the market and private investment into new power resources without the need for major new transmission investment.
"The growth of the Italian market has validated our prior acquisition of Solar Solutions, now SunPower Italia. SunPower and SunRay will seek to build on our success throughout Southern Europe and into the Middle East and Africa as demand for new power resources increases," he said.
