SunEdison (NASDAQOTH:SUNEQ) continues to expand its asset base in the solar industry, today announcing the acquisition of a 50% stake in Silver Ridge Power. The $178.6 million cash purchase from AES gives SunEdison a 50% stake in 336 megawatts of operational solar power plants.
This broadens SunEdison's solar portfolio ahead of the launch of a yieldco named TerraForm Power, which will be a publicly traded company that holds solar power plants. SunEdison could then push assets down to the yieldco, much like midstream energy companies do with MLPs.
SunEdison did not explicitly state that it would push the new plants to TerraForm, but the company is increasingly becoming a project developer and needs capital to keep building those projects. The yieldco model offers a way to monetize projects while keeping them in a subsidiary.
The market has had little reaction to the Silver Ridge Power stake today, but that's not surprising because it's really just business as usual. It'll be more important that SunEdison executes on its own pipeline and gets attractive terms in the TerraForm IPO, because that's where shareholders are going to see more value generation.