Ranked: Where bp's Lightsource bp Buyout Sits Among Billion-Dollar Solar Takeovers

bp has agreed to buy the half of Lightsource bp it does not already own. The equity cheque is $322.5 million. Enerdatics puts the enterprise value of the stake at $1.27 billion, because most of what bp is taking on is debt. Measured against Lightsource bp's earnings, it is the cheapest billion-dollar solar platform takeover Enerdatics has recorded since 2020. That ranking says as much about what bp is buying as about the price.

Key takeaways

• bp announced on 30 November 2023 that it would acquire the remaining 50.03 percent of Lightsource bp for a base equity value of $322.5 million, taking full ownership of the solar developer. The deal completed on 24 October 2024.
• Enerdatics calculates the enterprise value of bp's 50.03 percent Lightsource bp stake at $1.27 billion, combining the $322.5 million equity consideration with $952 million of corporate net debt attributable to the stake, out of $1.9 billion as of 31 December 2022, excluding project finance.
• bp's Lightsource bp buyout implies an enterprise value of 6.99 times Lightsource bp's 2022 EBITDA of $364.45 million, the lowest EBITDA multiple among billion-dollar corporate solar takeovers Enerdatics records between 2020 and 2024.
• Lightsource bp had a combined power portfolio of about 13 GW, of which 2.9 GW was operational and 1.7 GW under construction, with 29.23 percent in the US, 27.18 percent in Australia, 15.86 percent in the UK and 15.15 percent in Spain.
• bp first bought 43 percent of Lightsource bp in 2017 for $200 million and raised its interest to 50 percent two years later, before agreeing to buy the remainder in November 2023.

Why is the equity price so small against the enterprise value?

Because Lightsource bp carried a large corporate debt load. Enterprise value is the value of a business including its net debt, not just the price of its shares. As of 31 December 2022, Lightsource bp had $1.9 billion of corporate debt adjusted for cash, separate from the project finance sitting inside individual solar farms. The half bp is buying carries $952 million of that.

So the $322.5 million cheque is only a quarter of the economic price. The rest arrives on bp's balance sheet as debt. On completion, bp consolidates Lightsource bp's net debt, and the existing $900 million guarantee bp had issued on Lightsource bp's loans is removed from bp's reported adjusted debt.

The base equity value is also not final. The selling shareholders can receive further payments over time, depending on how the company performs and on the market value of pre-agreed assets divested from the portfolio. Cash at completion is subject to normal adjustments for trading performance, market values and acquired cash. A structure like this, often called an earn-out, lets a buyer pay less upfront and more only if value is realised.

What does a 6.99 times EBITDA multiple actually measure?

It measures the price against today's earnings, which for a developer leaves most of the value out. EBITDA is earnings before interest, tax, depreciation and amortisation, a rough proxy for operating cash flow. Dividing the enterprise value by EBITDA shows how many years of current earnings the buyer is paying.

For a business like Lightsource bp, current earnings come mainly from the 2.9 GW already operating. The value of a developer sits largely in what it has not yet built. Lightsource bp had 1.7 GW under construction and had built a 61 GW development pipeline, expanding from three countries in 2017 to 19 in 2023, with more than 1,200 staff. None of that pipeline appears in 2022 EBITDA.

That makes the low multiple striking rather than obvious. A buyer paying for a large pipeline would normally pay a high multiple of current earnings. bp paid a low one. Part of the explanation is the deferred payments, which move some of the price out of the base value. Part may reflect bp's position as the existing half owner, buying out partners in a business it already co-owned.

Where does the deal rank among billion-dollar solar takeovers?

Enerdatics' data shows how far below the field this deal sits. Enerdatics records 25 corporate solar transactions worth $1 billion or more announced between 2020 and 2024. Eleven of them carry an EBITDA multiple. Their median is 14.93 times, with the middle half of deals between 10.49 and 20.66 times. bp's Lightsource bp buyout, at 6.99 times, is the lowest positive multiple in the set. The next lowest are a US deal in May 2024 at 9.65 times and a US deal in October 2022 at 11.33 times. The highest, an Indian platform deal in January 2021, priced at 27.78 times. A Brazilian platform in August 2024 and a German one in March 2024 both came in near 14.9 times.

The ranking does not mean Lightsource bp was a weak business. It means bp bought it at a price set mostly by its operating assets, with part of the value of the development pipeline deferred into contingent payments.

How does the buyout fit bp's existing ties with Lightsource bp?

bp was already deeply involved. In June 2021, bp bought a 9 GW US solar pipeline from 7X Energy, and in July 2021 it contracted Lightsource bp to develop those projects under a Development Services Agreement. Under that agreement, Lightsource bp was reimbursed for development spending and received milestone payments when projects reached 50 percent and 75 percent development milestones.

The company also had a sizeable contracted base. Enerdatics has identified 26 utility and corporate PPAs signed for Lightsource bp assets across the US, UK, Spain, Poland, Brazil and Australia since 2019. Its US business has used tax equity alongside those contracts, as in Enerdatics' coverage of Lightsource bp's $97.9 million tax equity raise for Peacock Solar in Texas.

What does the deal signal for oil majors in renewables?

It signals that majors are consolidating the platforms they part-own rather than building new ones from scratch. TotalEnergies did the same with Total Eren in 2023, buying the 70.8 percent it did not own, as covered in Enerdatics' analysis of how TotalEnergies turned a 2017 option into full control of Total Eren. In both cases the buyer had held a large stake for years and knew the business.

bp said the acquisition would be fully accommodated within its financial frame and meet its expectations for returns from renewables and power. The deal was expected to close in mid-2024 and completed on 24 October 2024. What remains open is how much of the 61 GW pipeline bp chooses to build, and how much it sells, now that it controls all of it.

Frequently asked questions

How much did bp pay for the rest of Lightsource bp? bp agreed to pay a base equity value of $322.5 million for the 50.03 percent it did not own. Enerdatics calculates the enterprise value of the stake at $1.27 billion, including $952 million of attributable net debt, with further payments possible over time.

What EBITDA multiple did bp pay for Lightsource bp? The deal implies 6.99 times Lightsource bp's 2022 EBITDA of $364.45 million, the lowest multiple among billion-dollar corporate solar takeovers Enerdatics records from 2020 to 2024.

When did bp's acquisition of Lightsource bp complete? bp announced the deal on 30 November 2023 and expected it to close in mid-2024. The transaction completed on 24 October 2024.

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