Marathon Capital LLC advises Heelstone Renewable Energy LLC on the sale of 22 operating utility-scale solar projects to US Solar Fund. As a leading developer of solar, Heelstone is selling a significant portion of its portfolio at what has proven to be a critical time for many companies in the renewable industry.
This expedited sale took four months to complete, closing this March, but USF acquired the portfolio from Heelstone Renewable Energy for an equity purchase price of $38 million. This includes that USF will assume the existing project-level debt of the purchase. The deal included extensive solar projects in hotspot states like North Carolina, Oregon, and California.
For USF, this acquisition accompanied by their previous three purchases accounts for 70% of their net IPO proceeds. The remaining 30% will aid in refinancing existing project-level debt with better terms than their current facility. Although USF is growing, they are still considering raising additional equity capital for further acquisitions and refinancing to increase future profits. Their current utility-scale solar portfolio includes 37 projects and 380 MW according to their chairman Gill Nott.
Heelstone Renewable Energy is a leader in the solar industry based out of North Carolina, being advised by Marathon Capital LLC. They are experts in the process of planning, building, and operating utility-scale solar projects and have a portfolio of 500 MW. Their projects include working to develop a pipeline of over 1.5 GW of solar power. The sale of 177 MW of their portfolio is a significant portion of their projects, however, it will raise an equally large amount of cash flow for them to invest in other endeavors.
US Solar Fund plc, owned by New Solar Manager, is part of the premium segment of the London Stock Exchange after its IPO of $200 million was successful last April. As a growing company, they are involving themselves in many acquisitions in addition to that of Heelstone Renewable Energy. By diversifying their portfolio to other OECD countries and the Americas they are hoping to attract investors and improve dividends. US Solar Fund is taking on projects that have at least thirty years of stable cash flow to ensure their investments are long term power purchases.
“Heelstone’s high-quality operating assets directly compliment USF’s objective to provide a diversified mix of North American solar power assets to investors.â€
Marathon Capitals’ Managing Director and Co-Head of Chicago Ammad Faisal
https://heelstoneenergy.com/portfolio/
For both parties involved in this acquisition, the sale provides numerous opportunities. USF expands its portfolio, while Heelstone is able to maintain this extra cash flow which could be critical during this time of economic struggle. Both sides are approaching the current economic situation differently based on the goals of the companies. USF could be using this opportunity to invest and expand to support their investors, while Heelstone sells its projects to downsize project-level debt. Both of these tactics can be extremely beneficial for long term growth in this fluctuating economy.
