The Canada Pension Plan Investment Board (CPPIB) is acquiring a major North American wind farm operators, in what Greentech Media describes as one of the U.S. industry’s biggest mergers and acquisitions deals of the year.

CPPIB will buy shares in San Francisco-based Pattern Energy for a total of US$2.6 billion, but pay out a total of $6.1 billion after covering the company’s debts, Greentech reports. Pattern has a portfolio of 28 renewable energy projects in the U.S., Canada, and Japan.

“CPPIB, the C$400-billion pension fund that invests to pay the benefits owed to working Canadians in the Canada Pension Plan, created a standalone group to hold power and renewables assets in 2017,” the Globe and Mail adds. “It has invested more than $2.1 billion in renewable energy projects since, but the fund believes a lack of interest by investors in certain publicly-traded energy stocks has created opportunity for large institutions.”

That characterization might apply to Pattern, which Greentech traces back to its formation six years ago as a company “focused on the low-risk business of operating wind farms. In recent years, however, Pattern Energy has decided to move its shareholders into the higher-risk, higher-margin business of developing renewables projects.” The company began selling shares in 2013, but “has struggled to win over investors, despite its steady if unspectacular growth and generous dividends”.

If shareholders approve the purchase, CPPIB will take ownership and the shares will be taken off the market.

“The proposed acquisition of Pattern underscores the aggressive and ongoing push of Canada’s pension funds into the renewables market, particularly in the U.S. but also abroad,” Greentech adds. “To some degree, the push reflects a lack of opportunities in the stalled-out Canadian renewables market.” The U.S.-based industry newsletter lists recent asset purchases by Canadian investors Brookfield Asset Management, the Caisse de Dépôt et Placement du Québec, the Ontario Municipal Employees Retirement System, and the Alberta Investment Management Corporation.

“Over the years, Pattern Energy has been able to provide shareholders with a consistent dividend, and now our shareholders can realize the value embedded in the company,” Pattern CEO Mike Garland said in a media statement. “We believe the proposed transaction reflects the strength of the platform we have built.”

“We view [Pattern] as one of the best management teams in the renewables business, with a significant asset base in primarily North America, but also Japan, and an ability to develop further projects in those markets,” said CPPIB Managing Director Bruce Hogg, who runs the fund’s power and renewables group.

Greentech and Bloomberg both note that Pattern Energy was one of a group of renewable investment companies called “yieldcos” that formed several years ago to operate solar and wind energy projects. With their promise of rising shareholder dividends, the yieldcos “were darlings on Wall Street five years ago and fell out of favour as clean energy giant SunEdison Inc. stumbled toward bankruptcy,” Bloomberg notes. “But large investors including BlackRock Inc., Global Infrastructure Partners, and Brookfield see significant value in their clean energy projects, which boast steady returns and long-term contracts.”

“The yieldco as a vehicle has become somewhat maligned,” said BloombergNEF analyst Ethan Zindler. “These portfolios could find a better home privately.”