EDP to buy $2.2 bln U.S. Horizon Wind Energy
LISBON (Reuters) - Portuguese power provider Energias de Portugal (EDP) has agreed to buy U.S. wind-farm company Horizon Energy from Goldman Sachs, valuing Horizon's equity at $2.15 billion, boosting its renewable energy business.
EDP, Portugal's largest industrial company, said the acquisition would give it a foothold in the United States, as concerns about global warming increases demand for wind, wave and solar power as alternatives to fossil fuels.
Horizon has developed wind farms in New York, Iowa, Pennsylvania, Washington and Oklahoma and has projects under construction in Minnesota, Oregon, Texas and Illinois.
Investment bank Goldman Sachs bought Horizon, then a privately held company known as Zilkha Renewables, in 2005 for an undisclosed sum.
As a result of the deal, EDP hopes to generate more than half its electricity from renewable energy by the end of the decade.
"This acquisition raises the weight of 'clean energy' in EDP's portfolio," EDP Chief Executive Antonio Mexia said.
The United States is responsible for one-quarter of the world's carbon dioxide emissions and uses one-quarter of the world's crude oil. President George W. Bush has called on Americans to cut their gasoline use by 20 percent over a decade.
Houston, Texas-based Horizon has 559 gross megawatts of operating wind projects and another 997 MW under construction due to be completed by the end of this year.
EDP said the equity of Horizon totaled about $2.15 billion and it had debt of around $180 million. The acquisition would be adjusted for investments, which are estimated at $600 million, EDP said.
The purchase would be financed by $2.5 billion in debt and a tax credit worth $400 million, with an enterprise value for Horizon of $2.9 billion.
"Horizon also has a strong pipeline of projects in several stages of development in 15 different states across the country, with combined aggregate generating potential of over 9,000 MW," EDP said.
EDP Chief Financial Officer Nuno Alves said the purchase would be accretive for earnings per share in 2010.
"We see this purchase as very positive, it is a purchase in a market with strong growth and high potential," said Filipa Ferreira, an analyst at Lisbon Brokers.
Citigroup advised EDP on the deal.
- U.S. war veteran released by North Korea returns home |
- South Korea to make announcement on air zone; expansion is anticipated |
- Pro-Europe protesters gather for rally in Kiev
- Pennsylvania newlyweds "just wanted to murder someone together:" police
- Obama defends interim Iran deal, seeks to assure Israel
Nelson Mandela: 1918 - 2013
Reuters looks at the life and times of Nelson Mandela, an icon of peace and reconciliation who came to embody the struggle for justice around the world. Video