Algonquin Power & Utilities Corporation AQN announced that it has completed the sale of its non-regulated renewable energy business to a wholly owned subsidiary of LS Power for a total consideration of up to $2.5 billion, excluding debt. This deal excludes Algonquin Power’s hydro fleet.
Details of AQN’s Renewable Business
The renewables business is comprised largely of wind and solar assets located throughout the United States and Canada, including 44 operating assets with more than 3,000 megawatts (MW) of generating capacity and an 8,000 MW pipeline of wind, solar, battery energy storage and renewable natural gas projects in various stages of development.
Nearly 2,700 MW of the portfolio’s assets are located in the United States, with the remaining 300 MW in Canada.
Focus on Regulated Business
Algonquin Power intends to use the net proceeds from the transaction to pay down existing debt and further strengthen its balance sheet.
Along with the recent sale of AQN’s 42.2% ownership position in Atlantica Sustainable Infrastructure plc on Dec. 12, 2024, this transaction marks a milestone in the company’s efforts to turn AQN into a simpler, pure-play regulated utility. This should enable AQN to focus better on increasing the pace of energy transition.
Along with Algonquin Power, Eversource Energy ES sold its South Fork and Revolution Wind projects to Global Infrastructure Partners in September 2024. The adjusted gross proceeds from the transaction were $745 million. The divestiture of the assets resulted in Eversource Energy’s exit from the offshore wind business. The company now concentrates on its resources to become a pure-play regulated utility. These assets will deliver low-risk regulated growth opportunities and enable ES to provide clean energy transition benefits to its customers.
AQN’s Stock Price Performance
In the past month, shares of the company have lost 6.7% compared with the industry’s 6.6% decline.
Image Source: Zacks Investment Research
AQN’s Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies from the same industry are NiSource NI and IDACORP IDA, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NI’s long-term (three-to-five-year) earnings growth rate is 7.45%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) indicates a year-over-year increase of 7.3%.
IDA’s long-term earnings growth rate is 8.31%. The Zacks Consensus Estimate for 2025 EPS indicates a year-over-year increase of 8.3%.
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