The Selling Company: Padoma Wind Power, LLC had been in business approximately three years, and was owned by three principals and one minor shareholder. All of the shareholders had excellent credentials and industry experience, having developed and completed over 40 utility-scale wind energy projects in their careers. Due to the stop and go nature of the Production Tax Credit, the company’s revenues and profits exhibited wild fluctuations. Getting a handle on how, when and if revenues and profits would be generated was very difficult, and created a unique challenge in forecasting future growth. The company had, however, completed one major project of its own and helped bring in at least three others during the company’s brief history.
Why the company was sold: The need for huge amounts of cash in the form of turbine deposits, credit support for power purchase agreements, and other project development commitments are quickly pushing smaller developers out of the market.
Capital Alliance’s Performance: We delivered books to 72 potential buyers over the engagement, held 23 conference calls, and 20 meetings with buyers and the principals. This resulted in eight offers for the company.
Terms of the Transaction: NRG’s offer was perfectly aligned with the expectations of the Padoma shareholders. Cash and deferred payments, along with performance payments, were components of the deal, which gave both sufficient up-front money and back-end potential to guarantee the Padoma shareholders’ continued interest.
The Acquiring Company: NRG Energy is a leading multi-billion-dollar wholesale provider of electricity.