DEFA14A: Altus Power Announces Strong 2024 Results and Pending Acquisition by TPG

Altus Power reports a 26% increase in full-year revenue and announces a definitive agreement to be acquired by TPG for approximately $2.2 billion.

Summary

• Altus Power announced its fourth quarter and full year 2024 financial results.
• Full year 2024 revenues reached $196.3 million, a 26% increase compared to 2023.
• The company reported a GAAP net loss of $10.7 million for the full year, an improvement from the $26.0 million loss in the previous year.
• Adjusted EBITDA for the full year was $111.6 million, a 20% increase year-over-year.
• Altus Power surpassed 1 GW in operating assets and completed approximately 56 MW of new-build assets.
• The company added approximately 96 MW of assets in operation.
• Altus Power successfully structured an innovative tax equity transaction and partnership model.
• The company's year-ending cash balance was $123 million.
• On February 5, 2025, Altus Power signed a merger agreement to be acquired by TPG through its TPG Rise Climate Transition Infrastructure strategy for $5.00 per share in cash.
• The acquisition values the company at approximately $2.2 billion, including outstanding debt.
• The transaction is expected to close in the second quarter of 2025, pending stockholder and regulatory approvals.

Sentiment

Score: 7

Explanation: The sentiment is positive due to strong revenue growth, improved profitability, and the pending acquisition by TPG. However, the net loss and decreased EBITDA margin temper the overall outlook.

Positives

• Revenue increased by 26% year-over-year, reaching $196.3 million.
• Net loss decreased from $26.0 million to $10.7 million.
• Adjusted EBITDA increased by 20% to $111.6 million.
• The company surpassed 1 GW in operating assets.
• Altus Power is being acquired by TPG for $2.2 billion, providing shareholders with a cash payout.

Negatives

• The company reported a GAAP net loss of $10.7 million for the full year 2024.
• Adjusted EBITDA margin decreased from 60% to 57% for the full year 2024.
• Fourth quarter 2024 GAAP net loss totaled $56.5 million, compared to net loss of $40.0 million for the same period last year.

Risks

• The acquisition by TPG is subject to stockholder and regulatory approvals, and may not be completed.
• Disruptions from the transaction may harm the company's business.
• The company may face challenges in retaining and hiring key personnel.
• Changes to business relationships may result from the announcement or completion of the transaction.
• The company's financial performance could be affected by business uncertainty during the pendency of the transaction.
• The company may be adversely affected by economic, business, legislative, regulatory, credit risk and/or competitive factors.

Future Outlook

Due to the pending transaction with TPG, Altus Power will not be hosting a conference call or webcast to discuss its fourth quarter and full year 2024 results, and will not be providing a financial outlook for 2025.

Management Comments

• Gregg Felton, CEO of Altus Power, stated that the company retained its market leadership position in commercial solar and surpassed 1 GW of operating assets.
• Gregg Felton mentioned the focus on efficient capital markets execution, demonstrated by the new credit facility and innovative tax partnership executed in 2024.
• Gregg Felton believes that as Altus Power moves toward its pending acquisition by TPG, it is positioned to deliver even greater value to customers and partners with the flexibility and resources to accelerate deployment, drive innovation and expand access to clean energy at scale.

Industry Context

Altus Power's focus on commercial-scale solar aligns with the growing demand for clean energy solutions. The acquisition by TPG, a climate-focused investment firm, underscores the increasing interest in renewable energy assets.

Comparison to Industry Standards

• Comparing Altus Power's growth to companies like SunPower or Enphase Energy, which focus on residential and commercial solar solutions, Altus Power's focus on commercial-scale projects provides a different market segment.
• First Solar and NextEra Energy are other comparible companies in the renewable energy space.
• Altus Power's Adjusted EBITDA margin of 57% is competitive within the renewable energy sector, but it's important to consider the specific business models and project portfolios of comparable companies when assessing profitability.

Stakeholder Impact

• Shareholders will receive $5.00 per share in cash upon completion of the acquisition.
• Customers and partners may benefit from Altus Power's increased resources and flexibility as a private company.
• Employees may experience changes related to the acquisition and transition to private ownership.

Next Steps

• Obtain stockholder approval for the acquisition by TPG.
• Secure regulatory approvals for the acquisition.
• Complete the acquisition by TPG, expected in the second quarter of 2025.

Key Dates

Keywords

Altus Power, TPG, Acquisition, Financial Results, Solar Energy, EBITDA, Revenue