Allete Goes Private, Vestas’ Strong Q4

This week in business news, Allete is going private in a $6.2B deal, Aeris suffers from financial struggles, and Vestas secures 6, 000 MW in new orders during Q4.

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Welcome to Uptime News Flash. Industry news lightning fast. Your hosts, Allen Hall, Joel Saxum, and Phil Totaro discuss the latest deals, mergers, and alliances that will shape the future of wind power. News Flash is brought to you by IntelStor. For market intelligence that generates revenue, visit www.intelstor.com.

Allen Hall: First up, the U. S. Federal Energy Regulatory Commission has given its approval for a 6. 2 billion acquisition of Allete. The buyers are the Canadian Pension Plan Investment Board and Global Infrastructure Partners. The company brings significant renewable assets to the table, including Minnesota Power and Allete Clean Energy, which operates over 1, 300 megawatts of wind capacity across seven states.

Now, Phil, this has been going on for several months now, but it looks like it’s finally climbed that last rung in that ladder to become a private company again.

Phil Totaro: Yeah, which I think is interesting and important given who the investors are. Keep in mind that GIP just got gobbled up by BlackRock. And the Canadian Pension Plan Investment Board has been making, you know, boatloads of investments around the world.

Not only in Canada. Companies like this, but also individual assets where they are a usually minority but co owner so this is giving them the diversity, it’s giving BlackRock and, you know, through GIP you know, more assets in their portfolio, which they, you know, they’re obviously making a concerted effort and it’s, it’s part of their strategy to you know, to build up that, that pipeline.

So this is, I believe You know, a total of 1. 3 gigawatts of operational wind with substantially more in, in the pipeline. So, you know, it’s a great thing to, to see this happen and, and usually in a take, in a go private deal The reason you want to do that is to kind of sort out some of the financials and, and there’s an opportunity that they could, you know, re IPO Allete at some point.

I like the move because

Joel Saxum: Allete is a, you know, they’re not a huge wind operator, but Clean energy, but I know that they’ve got ambitions to do some more development. So we are bringing in fresh capital. Also Allete’s headquarters in Minnesota power is up in Duluth, Minnesota, which is a small town of about 80, people.

And this will bring some hope, hopefully bring some jobs in up there and a little bit of an expansion.

Allen Hall: Down in South America, Brazilian wind blade manufacturer Aeris has approached its creditors seeking a 60 day extension on upcoming interest payments.

The company’s financial strain stems from a slowdown in new wind turbine contracts. Leading to mounting pressure on its balance sheet. Now, current financials show a concerning picture with net debt reaching about 550 million reales and a debt to EBITDA ratio of 3. 2. Joel, Sonoma has made acquisition efforts towards Aeris for the last couple of years.

Do those offers become more serious on Aeris part as they run into some financial difficulty?

Joel Saxum: I think Aeris as a company has to turn to Sonoma as a more and more possible outlet. It just reminds me of a game of Monopoly I played at one point in time where I was trying to buy some houses and every time I came around to the houses that I wanted, The person who was holding them, they got a little bit more expensive.

And the game of Monopoly didn’t end as well as I wanted it to. But at this point in time, Iris uh, more than likely, I mean, this is, this is public knowledge approaching creditors for the 60 day extension there. That just signifies pain, right? And when pain is there, and the the Pain reliever is knocking on your door, sometimes you answer.

Phil Totaro: And, and just keep in mind what’s going on in the Brazilian market at this point and, and potentially why they’re, they’re in this situation. You know, they had orders with a number of different manufacturers, and those manufacturers have pulled back or pulled out of the market entirely. And the order book that they’ve got in Brazil is robust, but a lot of it’s very far in the future.

So it’s, it’s making for a bit of a short term challenging situation for them. And there are potentially several outlets they can avail themselves of to you know, to get back to a strong financial picture. And, and the Brazilian market, frankly, really needs to get back to, uh, you know, to doing more auctions and, and tenders for you know, additional power offtake.

And, and really start. Getting back on the horse.

Allen Hall: Vestas has secured over 6, 000 megawatts in new orders during the fourth quarter of 2024, spanning multiple continents. Now the U. S. is a big landing spot for a number of Vestas turbines and Europe also. So Vestas is spreading its wings a little bit. 1000 megawatts is a pretty substantial total.

It’s not the highest they’ve ever had in a particular quarter, but it is a strong quarter for Vestas, right, Phil?

Phil Totaro: Yeah, and it totals out to with the addition of all their offshore sales or order book that they took in 2024 to about 16 gigawatts. For the whole year, so it’s a, it’s a pretty, you know, decent, you know, slate of orders where, you know, in the U.

S. in particular, they, they’ve got a bunch of new orders for the V163 4. 5 which really seems like that’s starting to take off. We’ve calculated they’ve got about 2. 8 gigawatts worth of order book now for that turbine globally. With a bunch more that we’re expecting to be announced here in, in 2025.

So, you know, they’re, they’re doing pretty well with a brand new product platform and certainly their, their offshore orders as well for the V236.

Joel Saxum: Something to keep in mind with Vesta is when you see these new order numbers coming out from them, one of their strategic standpoints, they’re going to is to offer service packages with these turbines.

So depending on geography and where they’re at, some of these come with a 25 year FSA. So that is a lot more booked revenue for the future for them. That being said, since the new year, their stock is up about 6%. That looks good on Vestas.