SunEdison Inc. (NYSE: SUNE) and TerraForm Power Inc. (NASDAQ: TERP) Synergy

According to latest news, another synergy is on the charts. SunEdison Inc. (NYSE:SUNE) and TerraForm Power Inc. (NASDAQ:TERP) have come together for acquisition of First Wind for the sum of $2.4 billion. First Wind is currently the leading developer in wind projects in the US.

Of the total that this merger is paying for the acquisition, $1.9 billion is straight out price, whereas the rest of $510 million is earn-out. Of the total price that has been agreed upon, SunEdison Inc. (NYSE:SUNE) has willed to pay $1 billion, which includes the upfront consideration as well as the earn-out. TerraForm Power Inc. (NASDAQ:TERP) pays $862 million towards the deal.

The resultant acquisition is expected to make SunEdison Inc. (NYSE:SUNE) the biggest development company that has the ability to renew power. SunEdison Inc. (NYSE:SUNE) has succeeded in raising installation guidance of its project to a margin of 2.1 to 2.3 GW, from the previous 1.6 to 1.8 GW, as a result of this deal.

In addition to this, SunEdison Inc. (NYSE:SUNE) will acquire 1.6 GW of projects in t e backlog as well as those in the pipeline, which have been included in TerraForm Power Inc. (NASDAQ:TERP)’s project list. A further 6.4 GW developmental opportunities have been added on top of that. SunEdison Inc. (NYSE:SUNE) is working to speed up their project development cycle by utilizing services offered by First Wind’s functional platform.

SunEdison Inc. (NYSE: SUNE) CEO, Ahmad Chatila considers this development very positive for both the companies. He predicts that this merger will enable SunEdison Inc. (NYSE:SUNE) and TerraForm Power Inc. (NASDAQ:TERP) to engage in process that will diversify the renewable energy techniques it uses. This merger is expected to provide the companies with numerous opportunities to grow their capitalization capabilities and attain a strong position in the market on global levels.

SunEdison Inc. (NYSE: SUNE) shares went up by a scale of over 24%, bringing it up to $20.63, right after the market opening on Tuesday. The stock is being targeted to reach an impressive price of $26.67 based on a 52 week range that the company engages in trading, which is expected to take the mark up from $11.11 to $24.35. SunEdison Inc. (NYSE: SUNE) has total capitalt mark up of over $5 billion.

A projected $72.5 million is expected to come from TerraForm Power Inc. (NASDAQ:TERP) in the form of crude cash available for distribution (CAFD). The company upped its dividend guidance to $1.30 on per share basis for the year 2015. This takes the figure up to 44%, from the current $0.90 dividend rate.

TerraForm Power Inc. (NASDAQ:TERP) is projecting further acquisition of 521 MV of wind generating assets and will need to add 1.6 GW to list of projects that are expected to lessen between years 2016 and 2017.

The latest development has helped TerraForm Power Inc. (NASDAQ:TERP) to enable an increment of 50% to its energy portfolio. This will also give it more diverse authority on global levels, and help it widen its business ventures.