Boston’s First Wind acquired for $2.4 billion

Wind turbines at First Wind’s Bull Hill Wind Farm installation in Lincoln, Maine.Jonathan Wiggs /Globe File/2013

Wind power has long been considered alternative energy, a niche source of electricity that mostly kept environmentalists happy. But the $2.4 billion acquisition of Boston’s First Wind Holdings Inc. by two companies shows that wind energy is not only serious business, but big business.

In a deal announced late Monday, SunEdison Inc., a Missouri solar energy company, and Terraform Power Inc., a Maryland company mostly owned by SunEdison, said they would buy First Wind, which owns and operates about a dozen industrial wind projects in six states, including Maine and Vermont, and has several projects under development. First Wind, which last year expanded into solar power, also has two photovoltaic projects in Massachusetts.

Maeve Vallely Bartlett, secretary of the state’s Executive Office of Energy and Environmental Affairs, said the acquisition shows that the renewable energy industry has matured and Massachusetts has established itself a leader in the industry. She said the size of the deal would encourage investment in the state’s other renewable energy firms, which include an array of wind, solar, battery, and energy-efficiency firms.

“Deals like this get the sector jazzed up,” she said. “It shows these companies are financially viable and making money.”

First Wind, which has its headquarters near South Station has grown quickly in recent years, with its revenue rising from $7 million in 2006 to $250 million in 2013. The company employs 225, including 80 at its Boston headquarters.

The First Wind name will be phased out, but the company will maintain operations in Boston after the deal closes early next year. Officials of the three companies involved said they do not plan to lay off First Wind employees as a result of the deal.

The acquisition allows SunEdison to expand from solar into wind power. It paid $1.5 billion for First Wind, its intellectual property, and its pipeline of wind projects under development.

TerraForm Power was spun off by SunEdison earlier this year to operate its solar energy projects. Terraform paid $862 million for First Wind’s completed wind projects, which it will operate and maintain. TerraForm also will operate new wind power projects that SunEdison develops.

First Wind will become the wind energy division of SunEdison, making it one of the largest renewable energy companies. Last year, it had $2 billion in net sales.

Both companies’ stocks rose more than 25 percent on the news. Sun Edison’s shares closed Tuesday at $21.50, up from $16.60. TerraForm’s shares climbed to $32.75 from $25.84.

“SunEdison immediately becomes the largest renewable energy developer in the world,” said Carlos Domenech, president and chief executive of TerraForm, in an interview. “And for TerraForm, we effectively immediately double our prospects for growth.”

Developing major new wind power projects typically requires large upfront investments, which are only paid back gradually by utility companies that buy the power and pump it into the electrical grid. As part of SunEdison, First Wind would have access to larger pools of capital, analysts said.

“You need an awful lot of financing to build out these wind and solar farms,” said Theodore R. O’Neill, the managing director and a technology analyst at Connecticut-based Litchfield Hills Research LLC. “There aren’t any real synergies between setting up wind and solar farms, but sometimes you just need a bigger partner to grow.”

The company may also enjoy greater access to international markets through SunEdison’s existing solar power business, O’Neill said.

First Wind chief executive Paul Gaynor said the acquisition was a positive development that would allow the company and its workers to grow.

“In the era of renewables, we’re only in the second inning,” he said. “Even in the face of declining gas and oil prices, wind and solar costs have come down. In the right market, we’re very competitive.”