Brookfield To Become Controlling Shareholder Of TerraForm Power - Quick Facts

(RTTNews) - TerraForm Power, Inc. (TERP), an operator of clean energy power plants, and Brookfield Asset Management Inc. (BAM, BAM-A.TO ) said they have entered into a definitive agreement under which Brookfield will assume the role of TerraForm Power's sponsor and also become the controlling shareholder.

Brookfield will become the cornerstone investor in TerraForm Power with 51 percent ownership. The transaction has an implied total equity value of $1.7 billion and an implied total enterprise value of $6.6 billion.

Under the terms of the deal, TerraForm Power Class A shareholders, excluding Brookfield, will receive $11.46 per share in cash with the option for shareholders to elect shares in order to participate in future upside potential.

Assuming full proration, the Class A shareholders would be entitled to $1.94 per share in the form of a special dividend, $4.50 per share in additional cash consideration for Class A shareholders, and $6.44 per share total cash consideration as well as 0.53 shares in TerraForm Power post-closing.

The transaction has been approved by the Board of Directors of TerraForm Power. It also has the support of SunEdison Inc. (SUNEQ).

As part of the transaction, Brookfield and TerraForm Power will enter into a Master Services Agreement whereby Brookfield will provide strategic services and long-term investment advisory services.

In return, Brookfield will receive an annual management fee as well as a management incentive fee and incentive distribution rights aligning Brookfield's incentives with TerraForm Power's public shareholders.

As part of its strategic alternatives process, TerraForm Power also said it has entered into a settlement agreement with SunEdison Inc. (SUNEQ) in connection with the Chapter 11 bankruptcy case of SunEdison. This agreement is subject to the approval of the U.S. bankruptcy court overseeing the SunEdison Bankruptcy.