Algonquin Power to sell renewable energy business to LS Power for up to $2.5B

Algonquin Power & Utilities (NYSE:AQN) said Friday it agreed to sell its renewable energy business, excluding hydro, to LS Power for up to $2.5B.

The deal consists of $2.28B of cash at closing and up to $220M of cash tied to an earn-out agreement relating to certain wind assets.

Last year, activist hedge fund Starboard Value said Algonquin (AQN) should sell its renewable assets to help boost earnings and reduce debt.

The sale, combined with the agreement supporting the sale of Atlantica shares, “delivers on our plan to transform AQN into a pure play regulated utility, optimize our regulated business activities, strengthen our balance sheet, and enhance our quality of earnings,” CEO Chris Huskilson said.

Algonquin (AQN) also released Q2 results, showing a slight beat in adjusted earnings while missing on revenues.