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SunEdison, TerraForm to buy First Wind for $2.4B

Employees of SunEdison install photovoltaic solar panels on the roof of a Kohl's Department Store in Hillsborough, New Jersey.
Robert Nickelsberg | Getty Images
Employees of SunEdison install photovoltaic solar panels on the roof of a Kohl's Department Store in Hillsborough, New Jersey.

Solar company SunEdison and unit TerraForm Power said they would buy First Wind for $2.4 billion to enter the U.S. wind power market.

SunEdison's shares rose 6.6 percent to $17.70, while TerraForm shares rose 1.2 percent to $26.15 in after-market trading.

The deal comprises $1.9 billion in upfront payment and $510 million in earn-outs, the companies said.

Boston-based First Wind is operating or building renewable energy projects in the Northeast, the West and Hawaii, with a combined capacity of nearly 1,300 megawatts (MW) - enough to power more than 425,000 homes each year.

Read MoreCosts of solar key to growth: SunEdison CEO

SunEdison raised its 2015 installation forecast to 2.1-2.3 gigawatts (GW) from 1.6-1.8 GW. TerraForm increased its 2015 dividend forecast to $1.30 per share from 90 cents.

TerraForm was created by SunEdison to own and operate its solar power plants. TerraForm went public in July.

The deal is expected to close during the first quarter of 2015, the companies said.

SunEdison's share in the total consideration consists of an upfront payment of $1 billion and the earn-out portion.

TerraForm Power will acquire First Wind's operating portfolio for an enterprise value of $862 million.