Brookfield Renewable Acquires Duke Renewable to Increase U.S. Manufacturing Capacity by 50%
It looks like a win-win deal, but Brookfield Renewable (CA:BEP.UN, United States: BEP) On June 12, it announced that it would acquire the North Carolina-based company. Duke Energy (USA: Duckland) Launches an unregulated commercial renewable energy business with $2.8 billion (all figures in US dollars). This includes debt and non-controlling tax equity interests.
dukes Commercial Renewable Energy Portfolio The plant includes 3,400 megawatts (MW) of utility-scale solar, wind and battery storage in the United States. There is also 2,500 MW of capacity under construction and a further 6,100 MW in the development pipeline. The deal is expected to close later this year.
BEP shares are up 15.3% through 2023, while DUK shares are down 12.5%.
The deal could increase institutional interest in BEP shares. On Fintel’s Fund Sentiment Scoreboard, US-listed stocks score 83.24. DUK’s share price, based on a proprietary model that ranks companies based on their level of ownership accumulation, currently scores 73.47.
Rating discount
“With this acquisition, we will add a renewable energy platform operating at scale in a very attractive market, with significant upside from potential asset repowering and synergies, which will soon be meaningful. We expect this to contribute to strong cash flow.” Conor Teskey saidCEO of Brookfield Renewables.
The $2.8 billion enterprise valuation reflects a 30% discount to the valuation discussed by management on the earnings call. Industry paper PV magazine reported Tuesday. The sale is just the latest move in a trend for regulated utilities to separate their regulated businesses from their power generation and commercial renewable energy operating assets, according to the report.
capacity and cash flow
As of March 31, Brookfield had 3,652 MW of wind capacity in the US Although the results for the first quarter of 2023 did not disclose the solar power generation capacity by region, it was 4,266 MW worldwide as of the end of March. Assuming 75% is in the US, the company’s solar capacity is 3,200 MW, suggesting that the Duke acquisition will increase US wind and solar capacity by 50% and more. are doing.
Approximately 90% of the cash flows from these assets are from contracts with a weighted average useful life of 13 years. Brookfield said in a press release:. These are expected to add 3% to Funds Under Management (FFO) in 2024.
In the subsequent 12 months ending March 31, Brookfield generated 63% of its total revenue from its North American facilities.of Q1 2023, North American hydropower revenues attributable to Brookfield unitholders accounted for 43% of the total $772 million. Globally, wind and solar generate 30% of total revenue.
Along with announcing the acquisition in the United States, Brookfield announced that it had simultaneously completed the acquisition transaction and a private placement, raising $650 million in ongoing expansion funding.
Over the past 18 months, the company and institutional investors have agreed to invest up to $21 billion in renewable projects around the world, with Brookfield pledging $3.9 billion.
It also raised $600 million in 2023 from the sale of existing non-core assets by June 12. We expect annual FFO per unit to increase by at least 10% in 2023.
Duke Focuses on Regulated Renewable Energy
Duke Energy’s estimated net income of $1.1 billion will be used to pay down debt and invest in regulated renewable energy projects. The company expects to add more than 30,000 MW of capacity by 2035. The sale will allow the company to focus on its regulated markets and pass on the costs of growing in this area of its business.
“As one of the nation’s largest renewable energy operators, Brookfield has the resources to support the continued growth and success of our commercial renewable energy portfolio,” said Duke Energy CEO. ) said Lynn Goode in a company press release. We aim to transition to a purely regulated company with large grid and clean energy investment plans that benefit our customers and stakeholders. “
This story was originally Fintel.
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
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It looks like a win-win deal, but Brookfield Renewable (CA:BEP.UN, United States: BEP) On June 12, it announced that it would acquire the North Carolina-based company. Duke Energy (USA: Duckland) Launches an unregulated commercial renewable energy business with $2.8 billion (all figures in US dollars). This includes debt and non-controlling tax equity interests. dukes Commercial Renewable Energy Portfolio The plant includes 3,400 megawatts (MW) of utility-scale solar, wind and battery storage in the United States. There is also 2,500 MW of capacity under construction and a further 6,100 MW in the development pipeline. The deal is expected to close later this year.
BEP shares are up 15.3% through 2023, while DUK shares are down 12.5%. The deal could increase institutional interest in BEP shares. On Fintel’s Fund Sentiment Scoreboard, US-listed stocks score 83.24. DUK’s share price, based on a proprietary model that ranks companies based on their level of ownership accumulation, currently scores 73.47.Rating discount“With this acquisition, we will add a renewable energy platform operating at scale in a very attractive market, with significant upside from potential asset repowering and synergies, which will soon be meaningful. We expect this to contribute to strong cash flow.” Conor Teskey saidCEO of Brookfield Renewables.The $2.8 billion enterprise valuation reflects a 30% discount to the valuation discussed by management on the earnings call. Industry paper PV magazine reported Tuesday. The sale is just the latest move in a trend for regulated utilities to separate their regulated businesses from their power generation and commercial renewable energy operating assets, according to the report.capacity and cash flowAs of March 31, Brookfield had 3,652 MW of wind capacity in the US Although the results for the first quarter of 2023 did not disclose the solar power generation capacity by region, it was 4,266 MW worldwide as of the end of March. Assuming 75% is in the US, the company’s solar capacity is 3,200 MW, suggesting that the Duke acquisition will increase US wind and solar capacity by 50% and more. are doing.
Approximately 90% of the cash flows from these assets are from contracts with a weighted average useful life of 13 years. Brookfield said in a press release:. These are expected to add 3% to Funds Under Management (FFO) in 2024. In the subsequent 12 months ending March 31, Brookfield generated 63% of its total revenue from its North American facilities.of Q1 2023, North American hydropower revenues attributable to Brookfield unitholders accounted for 43% of the total $772 million. Globally, wind and solar generate 30% of total revenue. Along with announcing the acquisition in the United States, Brookfield announced that it had simultaneously completed the acquisition transaction and a private placement, raising $650 million in ongoing expansion funding. Over the past 18 months, the company and institutional investors have agreed to invest up to $21 billion in renewable projects around the world, with Brookfield pledging $3.9 billion.It also raised $600 million in 2023 from the sale of existing non-core assets by June 12. We expect annual FFO per unit to increase by at least 10% in 2023.
Duke Focuses on Regulated Renewable EnergyDuke Energy’s estimated net income of $1.1 billion will be used to pay down debt and invest in regulated renewable energy projects. The company expects to add more than 30,000 MW of capacity by 2035. The sale will allow the company to focus on its regulated markets and pass on the costs of growing in this area of its business.
“As one of the nation’s largest renewable energy operators, Brookfield has the resources to support the continued growth and success of our commercial renewable energy portfolio,” said Duke Energy CEO. ) said Lynn Goode in a company press release. We aim to transition to a purely regulated company with large grid and clean energy investment plans that benefit our customers and stakeholders. “This story was originally Fintel.
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
https://www.nasdaq.com/articles/brookfield-renewable-tops-up-u.s.-capacity-by-50-with-duke-renewables-buy Brookfield Renewable Acquires Duke Renewable to Increase U.S. Manufacturing Capacity by 50%