Boralex Inc. Boralex is on a shopping spree to expand its green energy production, spending more than $ 400 million on solar and wind installations in the United States and Canada under two separate agreements.
On Monday, the Montreal-based renewable energy company said it would pay $ 283 million for controlling interests in seven solar power facilities in Alabama, Indiana and California from Centaurus Renewable Energy LLC Centaurus Energy.
This followed the acquisition on Friday of minority interests in three Quebec wind farms held by the Caisse de depot et placement du Quebec. Boralex, which held the majority of stakes, pays $ 121.5 million for the remainder of the facilities, located in the regional county municipalities of Avignon in Gaspésie and Les Appalaches in eastern Quebec.
The agreements add to the financial and operational base of the company with its new chief executive, Patrick Decostre, who will take the helm next week. He replaces Patrick Lemaire, who is retiring after 14 years at the head of the company, which operates in North America and Europe.
The solar acquisitions are part of a four-year, multi-year corporate strategy to diversify energy sources and geography that the new CEO has played an important role in developing. The wind farm deal brings growth and simplification, which are also part of the planning in the context of a global transition to more renewable energies, Decostre said.
“What I would like to do, and as you can see, we have already started, is to step up the pace, not because of Boralex but because the market is like that”, he said. stated in an interview. “The renewable energy market in the world is accelerating and therefore it is important to dominate the market.”
Together, the new US solar interests add capacity of 118 megawatts to Boralex’s total and are supported by long-term purchase agreements with 21.5 years remaining on average. The assets are expected to add earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $ 20 million, Boralex said.
Boralex said it expects to complete the agreements by the end of the year, subject to customary conditions, including U.S. federal regulatory approval for acquisitions in Lafayette, Alabama, and Five Points, Calif. . Seventy-five percent of the price will be financed by debt.
Meanwhile, the additional interest from the Quebec wind farm will add 145 MW of net power to the company’s capacity and $ 31 million to its EBITDA. For the Caisse, this is not a complete withdrawal of assets, since the main provincial investment fund holds a 17.3% interest in Boralex.
The two transactions allow the company to use the proceeds of $ 201 million from a stock sale it concluded in August, said Bill Cabel, an analyst at Desjardins Securities. US assets appear expensive at 14 times their annual pre-tax operating income, but they offer long-term security, said Cabel, who has a “buy” rating on the stock.
“US solar assets also provide stable and diversified cash flow that will complement BLX’s wind-dominated portfolio, which is primarily located in eastern Canada and France,” he wrote. in a research note.
Boralex is a year and a half away from its expansion plan, which allows it to increase its installed capacity by 44% and to multiply its discretionary cash flows by 2.5. Adding solar and battery storage operations and growing in markets with promising renewable energy programs are key to the strategy.
Shares have climbed 64% this year amid broad interest in renewables among leading global institutions seeking companies focused on improving environmental, social and governance performance.
Mr Decostre said he expects the clean energy policies crafted by US President-elect Joe Biden and his new administration to be positive for his business and industry because they will align the message of the federal government on states such as New. York and California who pushed renewable energy.
Your time is precious. Receive the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.