Drax to buy Bluefield Solar in $755 million deal
The acquisition of BSIF will expand Drax’s UK renewables portfolio as it negotiates increasing challenges in the energy industry and seeks to hit government targets on clean energy
Drax has agreed to buy Bluefield Solar Income Fund in a deal valuing the renewable energy-focused investment company at nearly £561 million ($755.3 million), the British power group said on Monday.
The acquisition of BSIF, which operates wind farms, solar plants and small-scale wind turbines, will expand Drax’s UK renewables portfolio as it negotiates increasing challenges in the energy industry and seeks to hit government targets on clean energy.
Drax said on Monday that the acquisition would materially expand its renewables business by adding BSIF’s around 0.9GW portfolio and development pipeline, boosting underlying earnings from clean energy and improving cash‑flow visibility.
The FTSE 250-listed firm also stated the move aligns with its capital allocation priorities to allocate up to £2bn of incremental investment, primarily in flexible and renewable energy to create value and growth in the short, medium and long-term, and to support delivery of the UK’s objectives of energy security, affordability, and decarbonisation.
BSIF’s board has unanimously recommended the offer to shareholders.
Under the terms of the acquisition, BSIF shareholders will receive 92.574 pence per share in cash and an additional interim dividend of 2.25 pence per share.
Shares in Drax, which intends to fund the cash element of the deal through £1.1 billion in bridge financing, were up 0.8% by 0730 GMT after dropping 1.8% initially.
BSIF shares, which have been trading at a discount to net asset value, climbed 16% to 91.2 pence.
Soaring energy prices from the blockade in the Strait of Hormuz have increased demand for renewable energy and added to market volatility that started with Russia’s conflict with Ukraine in 2022.