ArcLight in $272m renewables deal

The Boston-based private equity firm has agreed to acquire Infigen's US wind business via a newly formed affiliate.

Primary Wind, a newly created portfolio company of ArcLight Capital Partners, will acquire interests in 18 wind farms and a US-based asset management company that Infigen, an Australian renewable energy company, has decided to sell as it looks to strengthen its balance sheet.

The 18 wind farms, which are located in eight states across the US, have a total installed capacity of approximately 1,557 megawatts (MW), of which Infigen’s interests comprise 1,089MW on an economic interest basis, the Australian company said in a statement.

“Infigen’s economic interest in these wind farms is commensurate with the percentage of the assets they own. Percentages vary by asset and this is the consolidated total,” a spokesperson for the company explained.

The $272.5 million price tag, arrived at after a competitive tender was conducted by UBS, also includes Dallas-based Infigen Asset Management. Proceeds from the sale will go towards paying down Infigen’s debt and placing the company’s Australian business on a stronger financial footing.

“Infigen has been assessing various options to improve the capital structure of our business and unlock security holder value for quite some time,” said Miles George, Infigen’s managing director. “The sale of our US wind business is consistent with that strategic objective, represents fair value for security holders having regard to the cash flow profile of the US assets and is a significant milestone on the path to improving the future prospects for Infigen and its security holders.”

“The US renewable power industry has undergone dramatic growth in recent years and the Primary Wind platform is poised to be a consolidator in this evolving industry,” added Dan Revers, managing partner of ArcLight, noting that the new portfolio company was established for this acquisition, which is expected to close in October.

The transaction will also include the transfer of the management and operations team of the acquired business, Infigen said in the statement.

Once the transaction is completed, Infigen’s wind portfolio will comprise six wind farms in Australia with a total installed capacity of 556.6MW.

Another transaction announced last month and expected to close in August will see Infigen shed its US solar development pipeline as well. The company said it would be selling it for $37.9 million to an unnamed global solar company.

Founded in 2001, ArcLight focuses on North American energy infrastructure assets. It invests across the entire energy sector including coal, oil and gas production, midstream, power generation, gas and electric transmission and distribution as well as related service businesses.

Since its inception, the firm has invested over $12.8 billion in more than 90 power, midstream and production assets.

It is currently in the process of raising its sixth flagship fund, which was launched eight months ago. As of May 1, it had raised $3.92 billion for the vehicle – just shy of its $4 billion target. Market sources expect the fund, which has a hard cap of $5 billion, to reach final close in the coming weeks. ArcLight did not respond to a request for comment.