Corporate and asset deals in the U.S. electric, multi-utility and independent power producer sector declined in the first quarter of 2022 from the previous quarter.
The number of company-level mergers and acquisitions shrank to eight, from 20 in the fourth quarter of 2021, and was half the number of deals compared to the first quarter of 2021.
Only one corporate deal out of the eight, worth $165.5 million, reported a transaction value. S&P Global Market Intelligence calculates the deal's transaction value from the amount paid for equity and in cash plus the value of assumed current liabilities, net of current assets.
The number of M&A asset deals in the U.S. over the same period in the utility and power sector dropped from 48 in the fourth quarter of 2021 to 31 in the first quarter of 2022, representing the lowest number of deals on a quarterly basis since the second quarter of 2018.
Three transaction values out of the 31 were reported in the first quarter, according to Market Intelligence data, totaling $343.7 million.
Whole company, minority deals
ALLETE Inc. announced plans to acquire 100% of community solar project development and finance company New Energy Equity LLC for $165.5 million. Existing and planned projects developed by New Energy Equity are located in Minnesota, New York and Illinois. Financial advisers for the deal include J.P. Morgan Securities LLC and Lazard Freres & Co. LLC. The acquisition is expected to close in April, pending regulatory approvals.
Asset deals
TotalEnergies SE subsidiary TotalEnergies Renewables USA LLC announced an asset deal in February to buy a commercial and industrial solar solutions business from SunPower Corp. for $250.0 million, which includes a $60.0 million additional contingent consideration or earn-out. The acquisition will accelerate growth in TotalEnergies' distributed generation footprint in the U.S. to support its goal of 4 GW of solar capacity by 2025.
A dual-fueled, combined-cycle generation facility in Wisconsin is the focus of an asset acquisition expected to close in January 2023. WEC Energy Group Inc. subsidiaries Wisconsin Public Service Corp. and Wisconsin Electric Power Co. signed an agreement to acquire LSP-Whitewater LP's Whitewater Cogeneration plant for $72.7 million. In company filings, the plant's output is stated as 236.5 MW. The plant began operating in 1997 and its output is under contract to Wisconsin Electric Power that is set to expire at the end of May.
New Energy Solar Manager Pty Ltd.'s purchase of a minority stake in the Imperial Valley Solar Project (Mount Signal Solar 2) in California, through US Solar Fund PLC, for $21.0 million is also expected to close during the first half of 2022. US Solar Fund already owns a 25% interest in the solar facility and is acquiring another 25% share.
