Renewable Energy M&A: Analyzing Pine Gate's Latest Solar Acquisition in US's MISO Market, estimated at $50k/MW

published on 12 June 2024

Pine Gate Renewables acquired a 450 MWdc solar portfolio in Mississippi (MISO) from Redeux Energy. These early-stage projects are part of MISO’s 2022 interconnection queue. This acquisition keeps Pine Gate on track to achieve its target of 3 GW of renewable infrastructure by 2027.

💰 Valuation Estimates:

Enerdatics values the deal at $0.05mn/MW, translating to an enterprise value of ~$22.5mn.

📊 Estimation Rationale:

– For estimations, Enerdatics has compared the current deal with AES Corp’s acquisition of the Petersburg solar project from NextEra Energy Resources in Aug’21, at $0.15mn/MW. However, we have valued the current deal at a significant discount to the precedent, primarily because:

* The projects that AES acquired were associated with a substation and are pending an Interconnection agreement, while there is no available information regarding the grid connection status and point of interconnection for the assets that Pine Gate acquired

* The recent delay in interconnection approvals in MISO has created uncertainty that significantly impacts the net present value of the projected revenue flow from the portfolio

* Shift in macroeconomic factors, such as surging interest rates and supply chain constraints, coupled with the recent tariffs imposed by the US administration on solar panel imports, are believed to exert downward pressure on the valuation of early-stage projects

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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