Hands buys into US green boom with $350m EverPower wind deal
Thursday 27 August 2009
The private equity tycoon Guy Hands has bought the US green energy group EverPower Wind Holdings in a deal understood to be worth $350m (£216m).
The acquisition comes following the boost to the country's renewable energy sector by new incentives put in place early in the Obama presidency.
Mr Hands said: "We see significant investment potential in the fast growing US renewable energy market, and EverPower has both a strong management team and an attractive portfolio of projects."
EverPower Wind Holdings, which is a wind farm developer based in New York, was sold by Good Energies, a renewable energy fund owned by the Dutch retailing family Brenninkmeijer, and the EverPower management, both of which will retain a stake in the business. So far, EverPower has more than 1,500 megawatts of wind power projects under development, in seven different states.
Not only is EverPower Terra Firma's first foray into the US, it is also only its second purchase since the hugely problematic £4bn acquisition of EMI at the top of the market in 2007. The private equity house was forced to pump extra money into the music giant twice in the first six months of this year, £28m in March and then more in May when the group missed targets imposed by its banking covenants.
EMI's problems were behind most of Terra Firma's eye-watering £1.37bn writedowns in March, and the company acknowledged it was facing major losses on the deal. Last month, Terra Firma started talks with Citigroup, which financed the buyout, about a restructuring plan that could see Mr Hands putting another £300m into the company. The bank has around £2.6bn in EMI loans.
Terra Firma's only other post-EMI deal was its purchase of Consolidated Pastoral Company, Australia's second-largest beef producer, in March for A$425m (£217m). The seller was James Packer, the son of the late media magnate Kerry Packer.
President Obama's $787bn economic stimulus package, signed off in February, included an array of measures aimed at green businesses. Alongside $32bn to transform the US energy transmission, distribution and production systems by improving the grid, renewable project developers can apply for a grant of up to 30 per cent of their costs for schemes started in 2009 or 2010.
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