Drax Group has agreed a $738 million (£548 million) all-cash deal to acquire listed renewable energy investor Bluefield Solar Income Fund, marking a significant expansion of its renewable generation and storage portfolio.

The transaction will be executed through Drax Smart Generation Holdco Limited, a wholly owned subsidiary of Drax Group, and covers the entire issued share capital of Bluefield Solar Income Fund (BSIF). Shareholders will receive 92.574 pence per share under the terms of the agreement.

BSIF owns and operates a diversified portfolio of solar, wind, and battery storage assets across the United Kingdom, including a significant pipeline of additional renewable and storage developments.

Commenting on the deal, Drax chief executive Will Gardiner said:

“BSIF could potentially be the biggest acquisition our business has ever made. It represents an attractive opportunity to substantially grow our renewable generation business, while being highly complementary to the Wider Drax Group’s existing operations and FlexGen portfolio. This deal can help meet the UK’s energy goals of security of supply, affordability and decarbonisation as rising levels of renewable electricity are expected to meet growing national power demand.”

BSIF chair Michael Gibbons said the company had evolved since its launch in 2013 as the UK’s first listed solar-focused investment trust:

“BSIF was a pioneer in creating the first UK-listed investment trust focused primarily on UK solar energy infrastructure. Since its IPO in 2013, BSIF’s operating portfolio has grown with the UK Solar PV market to circa 850MW, including an expansion into the onshore wind and battery storage asset classes.”

He also noted that changing market conditions, including higher interest rates, had impacted valuation levels and contributed to the decision to pursue a sale process.

The company’s development pipeline includes additional solar and battery energy storage system (BESS) projects, reflecting the continued expansion of hybrid renewable assets in the UK energy market.

The deal remains subject to shareholder and regulatory approvals.

Source: finance.yahoo.com