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Juhl in JV with 8030 Companies

Zacks Equity Research

Juhl Wind, Inc. (JUHL) has entered into a joint venture (“JV”) with 8030 Companies based in Colorado to acquire its existing wind farms and additional clean energy assets located in the U.S. and Canada. Post contract, this JV will function under the name of Juhl Wind.

Per the contract, Juhl Wind will buy 260 megawatts ("MWs") of older wind farms over three years through this joint venture. The company may purchase projects, worth approximately 60 MWs, in 2013 and 100 MWs projects in two subsequent years.

The joint venture has already completed its initial discussions with the owners of the existing wind farms in the upper Midwest. Further, it is expanding its footprints across North America.

The joint agreement targets those projects, which are in line with Juhl Wind’s core competencies in the market-wind farms under the generation capacity of less than 100 MWs. The company plans to acquire the decade old wind farms, where equipments are required to be replaced or improved. Therefore, the company will benefit from a production tax credit of 2.2 cents per kilowatt-hour after the purchase transaction is completed.

It is evident from Juhl Wind’s last few transactions that it follows steady inorganic growth strategy. In May this year and December 2011, the company acquired Midwest-based Power Engineers Collaborative, LLC ("PEC") and Chandler, Minnesota-based Valley View Wind Farm, respectively. These acquisitions primarily enhanced the company’s ability to expand its coverage in full array of clean energy divisions like natural gas, biomass and waste-to-energy services.

The joint venture is expected to boost Juhl Wind’s market position. The company is well poised to become the nation’s leading renewable energy provider in terms of focus on Community Based Wind Power development, ownership and management throughout the U.S. and Canada.

In addition, we believe this entity will work jointly on fuel innovation, increase efficiency, and provide clean energy and better services to its customers.

Joint ventures and merger-acquisitions in utilities sector are very common in the current scenario. In March this year, Exelon Corporation (EXC) merged with Constellation Energy (“CEG”) with a deal value of $7.9 billion.

Pipestone, Minnesota-based Juhl Wind, Inc. is a leading renewable energy provider in the U.S. and Canada. With a market capitalization of $12.50 million, the company has 20 full time employees. Juhl Wind currently has short-term Zacks #3 Rank (Hold rating).

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