Revolve Renewable Power Corp.'s (TSXV:REVV;OTCQB:REVVF) acquisition of WindRiver Power just closed, reported Shawn Severson, Water Tower Research analyst, in a Feb. 21 research note. WindRiver, based in Canada, owned, operated and developed wind and hydro projects in British Columbia and Alberta.
"This acquisition is a key milestone in Revolve's stated strategy of utilizing both a development strategy and acquiring operating assets," Severson wrote. The company is working toward becoming "a dedicated renewable independent power producer focused on long-term recurring revenue and cash flow."
Gained and total assets
Severson reviewed all of Revolve's assets post acquisition, including ones in operation, in development and under construction.
Through the transaction, Revolve gained three operating projects: Box Springs, Hunter Creek Hydro and Sakwi Creek Hydro. Together, they generated 28,463 megawatt hours of power energy in H1/23. During the same period, they yielded gross revenue of CA$3.17 million (CA$3.17M), of which WindRiver's portion was CA$0.9M.
Including these newly added projects, Revolve now owns, on a net basis, 12.33 megawatts (12.33 MW) worth of operating assets, encompassing battery storage and solar, wind and hydro power generation. All, in Canada and Mexico, are under long-term power purchase agreements.
Also from WindRiver, Revolve gained the 15 MW Tahimi Creek hydro project (70% ownership) and the 75 MW Kinskuch Lake hydro project (87.5% ownership), both in British Columbia. At varied stages, these are slated to be ready to build in the 2025-2026 time frame.
In total, Revolve now has more than 3 gigawatts worth of development projects, in all three North American countries.
"Revolve has set an ambitious goal to convert 40 MW per year over FY24 and FY25 from its distributed generation development portfolio into projects under construction or operational status," noted Severson.
As for projects under construction, the renewable energy firm has two, totaling 3.45 MW. One is a 3 MW combined heat and power project, the other and a 450 peak kilowatt rooftop solar project. Both are expected to be up and running later this year.
WindRiver's outstanding shares were included in the acquisition.
Financial aspects of deal
The deal cost Revolve CA$4.85M, Severson reported. To cover the amount, it used a CA$3.97 secured loan from RE Royalties and cash on its balance sheet.
Revolve is also responsible for contingent payments to WindRiver, up to CA$14M based on project milestones and up to CA$5.7M from previously sold assets.
Revolve is currently trading at about CA$0.33 per share.
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