Dec 30 2014
Atlantic Tele-Network today announced it has acquired substantially all of the assets of Green Lake Capital, LLC and certain of its affiliates, an owner and operator of commercial distributed generation solar power systems in Massachusetts, California and New Jersey.
ATN acquired these assets as part of a total transaction valued at approximately $103 million with approximately $64 million of cash and the assumption of $39 million of debt, through its newly formed subsidiary, Ahana Renewables, LLC ("Ahana"). Along with these assets, ATN has retained the management team and staff that developed and operates the Green Lake assets.
Ahana, based in San Francisco, operates 28 commercial solar projects at 59 sites with an aggregate 45.7 megawatts of electricity generating capacity. Customers include high-credit quality corporates, utilities, schools, and municipalities, and current power purchase agreement terms range from 10 to 25 years, with a weighted average life remaining of 14.4 years. All of the acquired sites are completed revenue- producing projects with at least one year of operating history. ATN currently projects that the acquired portfolio will produce an approximately 10% levered cash-on-cash IRR before additional investments and growth.
The transaction is expected to be accretive to ATN's 2015 operating cash flow and EBITDA, however, it is expected to be modestly dilutive to net income due to project financing assumed as part of the acquisition. For 2015, ATN currently expects Ahana to produce revenues of approximately $19 - $22 million and its EBITDA margins to be in the 70% to 75% range, subject to final purchase accounting adjustments.
"This investment is an excellent opportunity to expand our business and generate attractive returns for investors," said Michael Prior, Chief Executive Officer of the Company. "We believe that it is much like the investment we initially made in our wholesale wireless and fiber operations, in that it is an extensive, high quality infrastructure-based business with solid cash flows and the potential for expansion and higher returns through additional investment. While we continue to invest in our telecommunications businesses, our ownership of Ahana is an opportunity to expand critical infrastructure investment in an industry that is fragmented but rapidly expanding and evolving through an acquisition that has both solid cash producing facilities and high credit quality customers. We have investigated solar and other energy solutions as a way to lower power costs or to allow us to build in areas with poor or limited conventional power sources. This transaction provides us with an important growth platform and an entrepreneurial, yet disciplined management team under whose leadership we expect to leverage our initial investment by developing new projects."
"We are pleased to partner with an organization like ATN that has a demonstrated track record of prudent investment management and operating success," said Marvin Tien, Managing Director of Ahana.
"ATN brings us access to long-term committed capital, and the ability to scale the business in line with market growth and opportunity," added Jason Tai, Managing Director of Ahana.
ATN and the Ahana management team will together own approximately 97% of Ahana, and its financial results will be consolidated with ATN's results. ATN was advised by Media Venture Partners, LLC, Stoel Rives LLP and McGuireWoods LLP on this transaction.