TerraForm Global, Inc. (Nasdaq:GLBL) (“TerraForm Global” or the
“Company”), an owner and operator of clean energy power plants,
today announced that it has entered into a definitive merger
agreement under which Brookfield Asset Management Inc. (NYSE:BAM)
(TSX:BAM.A) (EURONEXT AMSTERDAM:BAMA) (“Brookfield”), a leading
global alternative asset manager, will acquire TerraForm Global for
approximately $787 million in cash and will assume approximately
$455 million in net debt, representing an enterprise value of
approximately $1.3 billion. TerraForm Global owns and operates, or
has contracts to acquire, a fleet of 31 wind and solar power plants
totaling 952 MW of capacity spread across Brazil, India, China,
South Africa, Thailand, Malaysia, and Uruguay.
Transaction Details
Under the terms of the merger agreement, Brookfield will
purchase all of the outstanding Class A shares of TerraForm Global
for $5.10 per share in cash. For Class A shareholders, this
represents a premium of approximately 50% to TerraForm Global’s
closing share price on September 16, 2016, the last trading day
prior to TerraForm Global’s announcement that its Board of
Directors had initiated an exploration of strategic alternatives to
maximize shareholder value. Immediately prior to the merger,
pursuant to a settlement agreement entered into between TerraForm
Global and SunEdison, Inc. (“SunEdison”) will exchange all of its
Class B shares and TerraForm Global, LLC Class B units into 25% of
the outstanding Class A shares on a fully diluted basis. The
transaction has been approved by the Board of Directors of
TerraForm Global, acting on the recommendation of its Corporate
Governance and Conflicts Committee, and has also been approved by
the Board of Directors of Brookfield. This transaction also has the
support of SunEdison.
Compelling Strategic and Financial
Rationale
“We are pleased to have reached a successful completion of
TerraForm Global’s strategic alternatives process to maximize value
for our shareholders,” said Peter Blackmore, Chairman and Interim
Chief Executive Office of TerraForm Global. “After a thorough
review of alternatives and the significant steps taken by the Board
and management to best position TerraForm Global for success, we
are confident a sale to Brookfield is the best possible transaction
for our shareholders. We look forward to working closely with
Brookfield’s experienced team to achieve a timely closing and a
seamless transition."
“SunEdison is supportive of this transaction which we believe
maximizes value for the estate and the independent shareholders of
TerraForm Global,” said John Dubel, Chief Executive Officer and
Chief Restructuring Officer of SunEdison.
Approvals and Timing to Close
The transaction is expected to be completed in the second half
of 2017 and is subject to certain closing conditions, including
shareholder approval by the majority of Class A shareholders
(excluding SunEdison and Brookfield), regulatory approvals, the
resolution of certain litigation against TerraForm Global, and
certain approvals from the U.S. bankruptcy court overseeing the
SunEdison Chapter 11 bankruptcy case, including the Court’s
approval of the settlement agreement between TerraForm Global and
SunEdison, and the Court’s approval of SunEdison’s vote in favor of
the Brookfield transaction. The completion of this transaction is
not subject to the completion of Brookfield’s transaction with
TerraForm Power, Inc. also announced today.
TerraForm Global’s Settlement Agreement with
SunEdison
TerraForm Global also announced today that it has entered into a
settlement agreement with SunEdison in connection with the Chapter
11 bankruptcy case of SunEdison (the “SunEdison Bankruptcy”). This
agreement is subject to the approval of the U.S. bankruptcy court
overseeing the SunEdison Bankruptcy.
The settlement agreement contains certain terms to resolve the
complex legal relationship between TerraForm Global and SunEdison,
including, among other things, an allocation of the total
consideration paid in connection with the Brookfield transaction
and, with certain exceptions, the full mutual release of all claims
between SunEdison and its affiliated debtors and non-debtors and
TerraForm Global and its subsidiaries. Under the settlement terms,
following the exchange of all of its Class B shares and TerraForm
Global, LLC Class B units for Class A shares, SunEdison will
receive consideration equal to 25% of the total consideration paid
to all of TerraForm Global’s shareholders, reflecting the
settlement of intercompany claims and cancellation of incentive
distribution rights. The remaining 75% of the consideration will be
distributed to existing Class A shareholders.
In connection with the merger agreement, SunEdison, TerraForm
Global and Brookfield entered into a voting and support agreement
under which SunEdison agreed to vote all of its shares of TerraForm
Global in favor of the Brookfield transaction. This agreement is
also subject to the approval of the U.S. bankruptcy court
overseeing the SunEdison Bankruptcy.
The settlement agreement has been approved by the Board of
Directors of TerraForm Global, acting on the recommendation of its
Corporate Governance and Conflicts Committee.
Additional information about the merger agreement and the
settlement agreement can be found in the Current Report on Form 8-K
that TerraForm Global filed with the Securities and Exchange
Commission today. A copy of the filing is available on the
Investors page of TerraForm Global’s website at
http://www.terraformglobal.com.
Advisors
Greentech Capital Advisors, Centerview Partners, and
AlixPartners acted as financial advisors to TerraForm Global on
this transaction. Sullivan & Cromwell LLP acted as legal
counsel for TerraForm Global. Greenberg Traurig, LLP and Robbins,
Russell, Englert, Orseck, Untereiner & Sauber, LLP acted as
legal counsel for the independent directors and the Corporate
Governance and Conflicts Committee.
Rothschild and Ankura Consulting acted as financial advisors to
SunEdison. Skadden Arps acted as legal counsel for SunEdison. For
certain of SunEdison’s second lien creditor constituents, J.P.
Morgan Securities LLC and Houlihan Lokey acted as financial
advisors, and Akin Gump acted as legal counsel.
About TerraForm Global
TerraForm Global is a renewable energy company that is changing
how energy is generated, distributed and owned. TerraForm Global
creates value for its investors by owning and operating clean
energy power plants in high-growth emerging markets. For more
information about TerraForm Global, please visit:
www.terraformglobal.com.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. These statements
involve estimates, expectations, projections, goals, assumptions,
known and unknown risks, and uncertainties and typically include
words or variations of words such as “expect,” “anticipate,”
“believe,” “intend,” “plan,” “seek,” “estimate,” “predict,”
“project,” “goal,” “guidance,” “outlook,” “objective,” “forecast,”
“target,” “potential,” “continue,” “would,” “will,” “should,”
“could,” or “may” or other comparable terms and phrases. All
statements that address operating performance, events, or
developments that the Company expects or anticipates will occur in
the future are forward-looking statements. They may include
financial metrics such as estimates of expected adjusted earnings
before interest, taxes, depreciation and amortization, cash
available for distribution, earnings, revenues, capital
expenditures, liquidity, capital structure, future growth,
financing arrangement and other financial performance items
(including future dividends per share), descriptions of
management’s plans or objectives for future operations, products,
or services, or descriptions of assumptions underlying any of the
above. Forward-looking statements are based on the Company’s
current expectations or predictions of future conditions, events,
or results and speak only as of the date they are made.
Although the Company believes its respective expectations and
assumptions are reasonable, it can give no assurance that these
expectations and assumptions will prove to have been correct and
actual results may vary materially.
By their nature, forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking
statements. Factors that might cause such differences
include, but are not limited to, the expected timing and likelihood
of completion of the Merger, including the timing, receipt and
terms and conditions of any required governmental approvals of the
Merger that could cause the parties to abandon the transaction; the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement; the risk of
failure by the Bankruptcy Court to confirm the Settlement
Agreement, the Voting and Support Agreement and any other agreement
entered into in connection with the Merger or the other
transactions contemplated by the Merger Agreement to which
SunEdison or any other debtor will be a party; the risk of failure
of the holders of a majority of the outstanding Shares to adopt the
Merger Agreement and of the holders of a majority of the Class A
Shares other than SunEdison and its affiliates and Brookfield and
its affiliates to approve the Merger Agreement and the transactions
contemplated by the Merger Agreement; the risk that the parties may
not be able to satisfy the conditions to the Merger in a timely
manner or at all; risks related to disruption of management time
from ongoing business operations due to the Merger; the risk that
any announcements relating to the Merger could have adverse effects
on the market price of the Company’s common stock; the risk that
the proposed transaction and its announcement could have an adverse
effect on the Company’s ability to retain and hire key personnel
and maintain relationships with its suppliers and customers and on
its operating results and businesses generally; the Company’s
relationship with SunEdison, including SunEdison’s bankruptcy
filings; risks related to events of default and potential events of
default arising under project-level financings and other agreements
due to various factors; risks related to the Company’s failure to
satisfy continued listing requirements of NASDAQ; the Company’s
ability to acquire projects at attractive prices as well as to
integrate the projects the Company acquires from third parties or
otherwise realize the anticipated benefits from such acquisitions,
including through refinancing or future sales; actions of third
parties, including but not limited to the failure of SunEdison to
fulfill its obligations and the actions of the Company’s
bondholders and other creditors; price fluctuations, termination
provisions and buyout provisions in offtake agreements; delays or
unexpected costs during the completion of projects the Company
intends to acquire; regulatory requirements and incentives for
production of renewable power; operating and financial restrictions
under agreements governing indebtedness; the condition of the debt
and equity capital markets and the Company’s ability to borrow
additional funds and access capital markets; the impact of foreign
exchange rate fluctuations; the Company’s ability to compete
against traditional and renewable energy companies; hazards
customary to the power production industry and power generation
operations, such as unusual weather conditions and outages or other
curtailment of the Company’s power plants; departure of some or all
of SunEdison’s employees, particularly key employees and operations
and maintenance or asset management personnel that the Company
significantly relies upon; pending and future litigation; and the
Company’s ability to operate the Company’s business efficiently,
including to manage the transition from SunEdison information
technology, technical, accounting and generation monitoring
systems, to manage and complete governmental filings on a timely
basis, and to manage the Company’s capital expenditures, economic,
social and political risks and uncertainties inherent in
international operations, including operations in emerging markets
and the impact of foreign exchange rate fluctuations, the
imposition of currency controls and restrictions on repatriation of
earnings and cash, protectionist and other adverse public policies,
including local content requirements, import/export tariffs,
increased regulations or capital investment requirements,
conflicting international business practices that may conflict with
other customs or legal requirements to which we are subject, the
inability to obtain, maintain or enforce intellectual property
rights, and being subject to the jurisdiction of courts other than
those of the United States, including uncertainty of judicial
processes and difficulty enforcing contractual agreements or
judgments in foreign legal systems or incurring additional costs to
do so. Many of these factors are beyond the Company’s control.
The Company disclaims any obligation to update or revise any
forward-looking statement to reflect changes in underlying
assumptions, factors, or expectations, new information, data, or
methods, future events, or other changes, except as required by
law. The foregoing list of factors that might cause results
to differ materially from those contemplated in the forward-looking
statements should be considered in connection with information
regarding risks and uncertainties which are described in the
Company’s Form 10-K for the 2015 fiscal year and Forms 10-Q for the
first, second and third quarters of 2016, as well as additional
factors it may describe from time to time in other filings with the
SEC or incorporated herein. You should understand that it is
not possible to predict or identify all such factors and,
consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of the Company by Parent.
In connection with the proposed acquisition, Parent and the Company
intend to file relevant materials with the SEC, including the
Company’s proxy statement on Schedule 14A. STOCKHOLDERS OF
THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE COMPANY’S PROXY STATEMENT, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain the documents
free of charge at the SEC’s website, http://www.sec.gov. The
Company’s stockholders will also be able to obtain, without charge,
a copy of the proxy statement and other relevant documents (when
available) by directing a request by mail or telephone to TerraForm
Global, Inc., 7550 Wisconsin Avenue, 9th Floor, Bethesda,
Maryland 20814: (240) 762-7700, or from the Company’s website,
https://www.terraformglobal.com/.
Contacts
Investors for TerraForm Global:
Brett Prior
Head of Investor Relations
investors@terraform.com
(650) 889-8628
Media for TerraForm Global:
Meaghan Repko / Joseph Sala
Joele Frank, Wilkinson Brimmer Katcher
media@terraform.com
(212) 355-4449