Shares in solar firm Altus Power (AMPS) shone 28% brighter today after it was bought by TPG’s (TPG) climate investment arm for $2.2 billion.
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Altus, the largest owner of commercial-scale solar in the U.S., said the all-cash deal was a “pivotal moment” for the business. Its board has unanimously approved the transaction and intends to recommend the deal to Altus Power stockholders.
Altus Hails a Huge Premium
Altus Power said the purchase price marked a 66% premium to its closing price on October 15 last year when it announced a formal review of “strategic alternatives”. Altus believes that the deal will help it meet more demand for clean electric power from commercial clients and residential homes. In addition, it seems confident that becoming a private company will put it in a better position to scale its operations and drive innovation. Completion of the deal is expected in the second quarter of this year.
According to the U.S. Energy Information Administration power consumption in the country is expected to rise to record highs in 2025. That’s not just from homes and commercial buildings, it is also the growth in data centers nationwide as businesses continue their digital transformations and adoption of cloud and AI technology. Increasingly, green power is seen as the go-to energy in the corporate world.
Uncertainy over Trump’s Solar Plans Remain
That has seen demand for Altus stock over time come from both sustainable and infrastructure investors. This is despite uncertainty around what potential changes from the “Drill, Baby, Drill” Trump administration could mean for grants and loans for the solar energy sector. TPG’s The Rise Fund, which includes TPG Rise Climate, manages $19 billion in assets focused on backing companies that aim to drive social and environmental impact.
Is TPG a Good Stock to Buy?
On TipRanks, TPG has a Moderate Buy consensus based on 6 Buy and 4 Hold ratings. Its highest target price is $80. TPG stock’s consensus price target is $74 implying an 14.06% upside.
