Deals

Partners Group exits US solar business early with $217m deal

The Silicon Ranch platform sold to Shell received a $100m investment by the firm in April 2016.

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Partners Group has sold its 43.8 percent interest in US solar platform Silicon Ranch for up to $217 million, less than two years after its initial investment.

The Switzerland-based group has exited the business by selling to Shell, marking the oil major’s first significant solar investment since 2006. Shell has agreed to pay at least $193 million, a fee that could rise to $217 million dependent on Silicon Ranch achieving certain milestones. Shell also has the opportunity to increase its stake after 2021.

Partners Group’s interest in Silicon Ranch will continue as a debt provider, with the firm issuing junior debt financing alongside the closing of the deal.

It initially invested in Silicon Ranch in April 2016, plunging $100 million into the three-year-old company, which then operated about 100MW of utility and commercial-scale assets in Tennessee, Georgia, Arkansas and Mississippi. The platform now has 880MW of operational or under-construction solar assets in 14 states, in addition to a 1GW development pipeline.

“With our support, the company has been able to execute its growth plan faster than expected and we are taking the opportunity to divest our equity stake to a strategic investor ahead of the original investment plan,” said Todd Bright, partner and head of private infrastructure in the Americas at Partners Group.

The group’s focus in the region is firmly on the booming midstream segment, it said in its market outlook released today. Partners Group has identified a range of opportunities that have been created by the shale revolution and is looking to build on its 2015 investment in Mexican gas transportation infrastructure group Fermaca and its jointly controlled stake in Sentinel Energy Center, an 800MW California-based natural gas-fired facility.

The sale is the second early exit Partners Group has made this week. It has also announced the divestment of its 21 percent stake in the Victorian Comprehensive Cancer Centre in Australia to AMP, citing strong interest from buyers convincing the company to exit early.