Andrew Forrest snaps up Windlab in new renewables play
Billionaire Andrew Forrest’s Squadron Energy extends his green energy reach, snapping up an ASX-listed wind farm developer.
Iron ore billionaire Andrew Forrest has extended his renewables investment, with his Squadron Energy in a $68.2m buyout of ASX-listed wind farm developer and operator Windlab.
Squadron will join with Federation Asset Management in the friendly $1 per share cash takeover of Windlab, which used atmospheric modelling technology developed by Australia’s CSIRO to identify and develop wind farm sites.
It is understood Squadron will own 75 per cent of Windlab if the company’s shareholders accept the deal, with Federation controlling the rest.
The company’s technology helps not just the selection of the best sites for wind farms, in terms of wind strength, but also focuses on the mapping of wind strength over the course of the day.
That is an increasingly important consideration in the east coast grid, already struggling with significant power fluctuations when solar arrays cease production in the early evening at peak periods of demand during summer months.
Windlab went public in 2017 after raising $50m to back its $2 float, leaving early investors still well under water on their initial investment.
It locates sites for wind farms, pushes them through to the point of an investment decision before bringing in a bigger partner to fund construction. Windlab says its technology has helped develop more than 1000 megawatts of wind-powered energy generation across the globe.
The company has struggled to convert its technology into a smooth cash flow, however, given it takes only a relatively small success fee in cash for delivering a construction-ready project to its partners, preferring to retain an equity stake in the finished wind farm for its input and recoup only its development expenses in cash.
Windlab booked an $11.7m loss in the first half of the financial year, on revenue of $4m. It finished December with $15.5m, but $12m of that was restricted for use in East Africa, under the terms of a $14m cash injection into a local subsidiary by Japan’s Eurus Energy Holdings.
Windlab shares last traded at 84c, and it says the agreed offer is a 40 per cent premium to its average trading price over the last month.
In February Federation kicked off the search for investors for a $300m fund aimed at investment in the development of renewable generation assets and storage.
The the acquisition of Windlab appears to be a key plank in the deployment of those funds, with Federation’s head of renewable energy Stephen Panizza saying in a statement on Wednesday that the consortium of Federation and Squadron would bring the company “the capital necessary to develop the portfolio and capture Windlab’s full potential”
The iron ore billionaire said on Wednesday Squadron’s role in the consortium would extend his involvement in the renewable industry.
“The unique technical capabilities of the team and the strong portfolio of project opportunities give Windlab a leading position in wind generation in Australia. Alongside our recent investments in solar projects, this investment also underscores Squadron Energy’s vision for a sustainable energy future,” he said.
Last year Squadron joined Grok Ventures, the investment arm of Atlassian billionaire Mike Cannon-Brookes, in a capital raising for Sun Ventures, which wants to build a giant solar farm in the Northern Territory to supply electricity to Australia and Singapore.
It has also been linked to a rescue deal for the 128MW Cunderdin solar farm in WA.
Mr Forrest’s Fortescue Metals Group has also embarked on an ambitious program of adding renewable energy to the mix powering its Pilbara iron ore mines, in January adding a 150 megawatt solar and battery plant to plans to build a grid linking its network of mines in the region.
Windlab surged on the news of the friendly takeover offer on Wednesday, closing at 96.5c.
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