Brookfield to pay $1bn for Scout Clean Energy

December 2022 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2022 Issue

Private equity firm Brookfield Renewable and its institutional partners have agreed to acquire Scout Clean Energy in a $1bn deal.

Under the terms of the transaction, Brookfield will pay $1bn for Scout Clean Energy and will also commit to investing an additional $350m to support the company’s business development activities.

Scout currently has an operating wind portfolio of 1.2GW, 400MW of which is managed on behalf of third parties. The company also has a pipeline of more than 22GW of wind, solar and energy capacity across 24 US states including almost 2500MW of under construction and advanced-stage projects.

Scout was acquired by Quinbrook Infrastructure Partners, a specialist investment manager focused exclusively on lower carbon and renewable energy infrastructure, at the start-up stage in 2017, and under Quinbrook’s sponsorship has quickly established a reputation for expertise in taking utility-scale wind, solar and energy storage projects through the full development cycle, from greenfield through interconnection, permitting, commercialisation, construction and operation.

“Scout is pleased to be sponsored going forward by an industry-leading partner to help Scout continue to grow our rapidly expanding pipeline of wind, solar and battery storage projects across the United States” said Michael Rucker, chief executive and founder of Scout. “The accelerated expansion Scout has experienced is a direct result of Quinbrook Infrastructure Partners support and confidence in our business model. With the recent passage of the IRA, we believe now is the right time for Scout to move into our next phase of growth with a highly respected and experienced partner, like Brookfield.”

“We are thrilled to be putting more dollars to work in our U.S. renewables business,” said Connor Teskey, chief executive of Brookfield. “Our development pipeline in the United States is now close to 60,000 MW and is well diversified across wind, utility-scale solar, distributed generation, and energy storage. Combined with our existing fleet we are well positioned for continued growth as owners and operators of one of the largest diversified clean power businesses in the country.”

“Scout hosts a remarkable collective of professionals, and we are proud of all that we have accomplished together,” said David Scaysbrook, co-founder and managing partner of Quinbrook. “We have far exceeded our plans for investor value creation in sponsoring Scout from its infancy and now is the right time for us to hand the business on for its next growth chapter. We fully expect to see Scout become a very prominent figure in the US renewables landscape in the coming years.”

Brookfield has also agreed to acquire Standard Solar for $540m, with the potential to invest an additional $160m to support the business’ growth initiatives. Both Scout and Standard Solar will continue to operate as independent businesses within the Brookfield Renewable US platform. The transactions will be invested through the Brookfield Global Transition Fund I (BGTF I), which is the largest fund in the world focused on the energy transition.

A subsidiary of Brookfield Asset Management, Brookfield Renewable currently has around 24GW of installed capacity and around 100GW in development. In January 2022, the company acquired US-based clean power developer Urban Grid and its project pipeline for $650m. Brookfield has invested or allocated $3.5bn to the North American clean energy sector this year.

The announcement of the Scout deal came a month after the passage of the $430bn Inflation Reduction Act, seen as the biggest climate change package in US history. The Act has led to increased dealmaking in the renewables sector as it provides substantial tax credits for up to a decade.

Richard Summerfield