North Yorkshire power generator Drax Group said on Monday it has agreed to buy Bluefield Solar ‌Income Fund (BSIF) in a deal valuing the renewable energy-focused investment company at about £561 million.

The acquisition of BSIF, which operates wind farms, ​solar plants and small-scale wind turbines, will expand ⁠Drax’s UK renewables portfolio.

BSIF shareholders would receive 92.574 pence per share in cash and an ​additional interim dividend of 2.25 pence per share.

Drax intends to fund the cash element of the deal ‌through £1.1 ⁠billion in bridge financing.

BSIF shares, which have been trading at a discount to net asset value, jumped ​16% to around 91.2 ​pence.

“Drax believes the acquisition of BSIF offers an attractive opportunity to grow its UK renewable generation business whilst being highly complementary to the Wider Drax Group’s existing operations and FlexGen portfolio,” said Drax.

“The acquisition offers Drax direct access into a c.0.9GW renewable portfolio, comprised of operating and under construction solar and wind assets, plus a >1GW (2.9GW gross capacity) development pipeline to be constructed across the next decade.

“These assets can complement the Wider Drax Group’s existing portfolio of c.2.2GW of FlexGen assets and developments and 2.6GW of biomass, creating a broader base of UK generation assets and associated earnings.

“The acquisition aligns with the Wider Drax Group’s strategic and capital allocation priorities to allocate up to £2 billion of incremental investment (between 2025 and 2031), primarily in flexible and renewable energy to create value and growth in the short, medium and long-term, and to support delivery of the UK’s objectives of energy security, affordability, and decarbonisation.

“Drax believes that the acquisition is underpinned by strong cash generation, a disciplined approach to capital allocation, and attractive returns for Drax shareholders.

“BSIF, a publicly listed investment company which operates a portfolio of UK based renewable energy infrastructure assets (including photovoltaic plants, wind farms and small-scale wind turbines), supports Drax’s core UK generation focus and, as an acquisition, represents a compelling opportunity to add operating assets with predominantly contracted cash flows, in addition to under construction and development assets to the Wider Drax Group’s existing portfolio …”