8-K: Altus Power Addresses Merger Lawsuits with Supplemental Proxy Disclosures

Altus Power supplements its proxy statement to address lawsuits challenging its merger with Avenger Parent, Inc., while maintaining that the allegations are without merit.

Summary

• Altus Power is facing lawsuits challenging its merger with Avenger Parent, Inc., a subsidiary of TPG Global, LLC.
• The lawsuits allege that the proxy statement filed by Altus Power contains false and misleading statements and/or omissions.
• To avoid delays and minimize costs, Altus Power has agreed to voluntarily supplement the proxy statement, without admitting any liability or wrongdoing.
• The supplemental disclosures address concerns related to rollover shares, the background of the merger, financial analyses, and other matters raised in the lawsuits.
• Moelis acted as financial advisor to Altus Power in connection with the Merger and will receive a transaction fee (currently estimated to be approximately $10 million).
• The company maintains that the allegations are without merit and that additional disclosures are not required under applicable laws.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is facing lawsuits, it is taking proactive steps to address them. The company maintains that the allegations are without merit.

Positives

• Altus Power is proactively addressing the legal challenges to the merger to minimize potential disruptions.
• The company is providing additional information to stockholders, even while maintaining that the original disclosures were sufficient.

Negatives

• Altus Power is facing multiple lawsuits challenging the merger, which could create uncertainty and potentially delay the transaction.
• The company is incurring costs associated with defending against the lawsuits and preparing supplemental disclosures.

Risks

• The lawsuits could potentially delay or prevent the completion of the merger.
• Adverse rulings in the lawsuits could expose Altus Power to financial liabilities.
• The merger agreement could be terminated under certain circumstances, requiring the company to pay a termination fee or other expenses.
• The company's business could be harmed by disruptions related to the merger.

Future Outlook

The company is focused on completing the merger with Avenger Parent, Inc., subject to stockholder and regulatory approval and the satisfaction or waiver of other closing conditions.

Management Comments

• The Company believes that the allegations asserted in the Matters are without merit and additional disclosures are not required or necessary under applicable laws.
• The Company denies that it has violated any laws or breached any duties to its stockholders.
• Nothing in this Current Report shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein.
• To the contrary, the Company specifically denies all allegations in the Matters that any additional disclosure was or is required.

Industry Context

The renewable energy sector is experiencing increased M&A activity, driven by the growing demand for clean energy and the availability of capital. Private equity firms like TPG are actively investing in the sector, seeking to capitalize on the long-term growth potential of renewable energy assets.

Comparison to Industry Standards

• The document references comparable companies like Clearway, Innergex, Boralex, Northland Power, and XPLR in the context of financial analysis.
• These companies are used to derive valuation multiples for Altus Power, such as TEV/EBITDA.
• The selected precedent transactions analysis considers transactions involving target companies that focus on renewable power generation and non-regulated power providers.
• Moelis selected a reference range of TEV / 2024E Adjusted EBITDA multiples for Altus Power of 12.0x to 14.0x.

Legal Proceedings

• Three lawsuits have been filed challenging the merger: Matthew Jones v. Altus Power, Inc., et. al., Lawrence Bass v. Robert Bernard, et al., and Michael Kent v. Altus Power, Inc. et al.
• The lawsuits allege that the proxy statement contains false and misleading statements and/or omissions.

Related Party Transactions

• The Rollover Stockholders will contribute certain of their respective Rollover Shares in exchange for newly issued equity interests of Parent in accordance with the terms of the Rollover Agreement.

Stakeholder Impact

• The merger could impact stockholders through the merger consideration and potential changes in the company's strategy and operations.
• Employees could be affected by potential changes in management and organizational structure following the merger.
• Customers and suppliers could be impacted by changes in the company's business relationships and operations.

Next Steps

• Altus Power will hold a special meeting of stockholders on April 9, 2025, to vote on the merger agreement.
• The company will continue to defend against the lawsuits and work towards satisfying the conditions for closing the merger.

Key Dates

Keywords

Merger, Lawsuits, Proxy Statement, Altus Power, Avenger Parent, TPG, Supplemental Disclosures, Moelis, Stockholders