Alternus Energy Inc., a global renewable energy company, today announced a total acquisition that will consist of 7 operating photovoltaic plants located in Italy.
In aggregate, the plants have a total installed capacity of 5.1 MWs, bringing the Company's total European installed capacity to 29.1 MWs of owned solar projects.
The total compensation for the acquisition is approximately $8.1 million cash, less $1.5 million held back for the closing of the final plant, and less $0.4 million held in escrow against certain tax open items and as a hold back for any unexpected items. The Company will utilize its existing credit facility to fund the transaction. The closing of the final plant is expected to occur by June 30, 2019.
The 5.1MW of parks currently generate annual revenues in excess of $1.5 million at over 85% gross margins. ALTN expects to increase the annual production of the parks by about 20% after some identified remedial work which would then increase both annual revenues and gross margins by the same percentage.
Vincent Browne, Alternus Energy's Chief Executive Officer, President and Chairman, commented, "This acquisition is a perfect fit with our business operations and long-term goals of securing long term government counter-party contracts that provide predicable positive cash flows. These particular projects have over 12 years left to run on these contracts meaning that ALTN will have over $20 million of backlog revenues contracted for the next 12 years. Thereafter the plants continue to operate and sell energy to the grid at the then prevailing market prices. This transaction also once again shows our ability to acquire assets below the prevailing market value and so we will book an immediate gain to shareholder equity reflecting this difference and increase total assets by the same amount.
"Our pipeline remains strong across Europe in Germany, Italy and The Netherlands. We are well on our way on our target to exit 2019 with over 100MWs of installed power that combined, should deliver over $15 million in recurring annual revenues and approximately $300 million contracted revenue backlog over the following 15 - 20 years."