SAN FRANCISCO (TheStreet) -- SunEdison (SUNE) and its subsidiary TerraForm Power (TERP) announced Monday they are teaming up to acquire a leading wind operator First Wind in a $2.4 billion deal.

Solar power developer SunEdison is aiming to use the acquisition to enter the wind market, while renewable energy power plant operator TerraForm Power is seeking to increase its geographic reach and increase its energy generation output by 50%. 

The deal is expected to close in the first quarter next year.

"The acquisition of First Wind transforms both SunEdison and TerraForm Power into diversified renewable energy companies and will make SunEdison the leading renewable power plant developer in the world," said SunEdison President and Chief Executive Officer Ahmad Chatila in a statement.

He added that by "bringing together First Wind's proven development and operational capabilities and SunEdison's global corporate infrastructure and renewable energy development and finance experience, we will be well-positioned to capitalize on the significant growth opportunities in the global wind power markets and drive returns to shareholders of both SunEdison and TerraForm Power."

SunEdison soared 8.1% in after-hours trading to $17.86. TerraForm, an indirect subsidiary of SunEdison, gained 1.2% in after-hours trading to $26.15. First Wind, based in Boston, is privately held.

With the First Wind acquisition, SunEdison will increase its pipeline, backlog and leads by 8 gigawatts (GW). The company noted that it's raising its installation guidance for 2015 to 2.1 to 2.3 GW from 1.6 to 1.8 GW. With the increased capacity for generating energy, it means SunEdison's shareholders are expected to benefit from increased cash flow, revenues and dividend payments spun off from indirect subsidiary TerraForm, according to SunEdison.

For TerraForm, the First Wind acquisition also will enhance its growth strategy through diversification of the types of energy systems that it deploys. But for TerraForm investors, perhaps, one of most important aspects in the short-term is that it will add to the company's anticipated earnings immediately rather than reduce it.

"This acquisition is immediately accretive and establishes TerraForm Power as a leading asset owner in the wind energy market while demonstrating the company's commitment to delivering on TerraForm Power's diversified growth strategy," Carlos Domenech, TerraForm Power CEO, said in a statement.


--By Dawn Kawamoto in San Francisco.

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