Company Overview and Background
Serena Energia S.A. (B3 Ticker: SRNA3) is a Brazilian renewable energy company engaged in the generation and sale of electricity from 100% clean sources – primarily wind farms, with additional hydro and solar assets . The company was originally known as Omega Energia (and before that, Omega Geração) and rebranded to Serena Energia in December 2023 . Founded in 2008, Serena has grown into one of Brazil’s leading pure-play renewable power producers, with its headquarters in São Paulo . Today, Serena operates 2.8 GW of contracted renewable capacity across Brazil and the United States , making it a significant player in the clean energy space. Notably, Serena is listed on the B3 (Brazil’s stock exchange) in the Novo Mercado segment (highest governance tier) under the ticker SRNA3 .
Ownership & Recent Developments: Serena attracted global investor interest in recent years – in 2022, UK-based Actis LLP acquired a stake as a strategic partner. In May 2025, a consortium of Actis and Singapore’s sovereign fund GIC announced a proposal to take Serena Energia private via a tender offer . The offer price is R$11.74 per share, and Serena’s shareholders voted in June 2025 to waive a poison pill and pave the way for this acquisition. If completed, Actis/GIC would assume joint control of Serena . This prospect has driven Serena’s stock up over 100% year-to-date, now trading around the offer price. While the deal is pending regulatory approvals and a two-thirds acceptance of the free float , investors should be aware that Serena’s days as a public company may be numbered under the new ownership structure.
Business Model and Expansion Plans
Serena Energia’s core business is developing and operating renewable power projects and selling energy through long-term contracts. Its portfolio is dominated by large wind farms clustered in high-resource regions of Brazil (such as Bahia, Piauí, Rio Grande do Sul) and a utility-scale wind project in Texas, USA . The company takes pride in being a pioneer in wind and solar generation, often partnering directly with corporate off-takers to supply clean power. For example, Serena’s wind and solar plants provide energy to thousands of Brazilian corporate and residential customers – including major firms like Heineken and Cargill – via the free market (corporate PPA) system . The company has also invested in distributed generation (DG) projects (smaller-scale solar installations for commercial consumers): as of mid-2025 Serena had 33 DG plants (86 MW) connected, with a few more in final stages .
Growth Pipeline: Serena has an ambitious expansion pipeline focused on both Brazil and the U.S. In Brazil, it is adding new phases to its wind complexes and exploring solar “hybrid” additions to existing wind sites. For instance, Serena is developing an Assuruá solar farm (100 MW) to complement its large Assuruá wind complex in Bahia . It is also working on late-stage plans for ~125 MW of new wind capacity in Brazil . In the U.S., Serena completed the 265.5 MW Goodnight I wind farm in Texas in late 2023 and has rights to a second 265 MW phase (Goodnight II) that is ready-to-build pending contracting . Beyond these, Serena’s longer-term pipeline is sizable: the company has identified up to 4.2 GW of potential solar projects in the U.S., ~260 MW of additional wind in Brazil, and even battery storage projects (up to 864 MW) in early-stage evaluation . This robust pipeline underscores Serena’s vision to 20x its EBITDA since its 2017 IPO and continue scaling over the coming decade . Management has stated that its strategy is to reinvest cash flows into growth projects rather than pay dividends at this stage, aiming to drive capital appreciation for investors over the long term.
Supplying Clean Energy to AI Data Centers: A distinctive expansion avenue for Serena is its focus on powering the booming data center industry – especially facilities running energy-intensive artificial intelligence (AI) and cloud workloads. Serena has forged partnerships with hyperscale data center operators to supply them with dedicated renewable energy. In August 2024, Serena announced Latin America’s largest renewable energy deal in the data center sector, agreeing to supply 393 MW of wind power from new wind farms (Assuruá 4 and Ventos da Bahia 3 in Bahia) to Scala Data Centers, a leading hyperscale operator . This long-term contract (starting in 2025) will meet Scala’s power needs – including its growing AI server demand – with clean energy, and Scala will even take an equity stake in those wind assets . Serena’s management highlighted that this partnership positions Serena as an ideal energy provider for high-performance computing and AI infrastructure in both Brazil and the U.S. . Another similar deal was struck with ODATA (Aligned Data Centers) in 2024, where ODATA expanded its wind energy contract with Serena by 135%, securing supply from Serena’s Assuruá IV wind farm (212 MW) to achieve 100% renewable usage . These deals underscore Serena’s expertise in tailoring renewable solutions for data centers’ huge power needs driven by cloud and AI computing .
Serena Energia’s wind farms in northeast Brazil have been contracted to provide clean power for hyperscale data centers. Partnerships with firms like ODATA and Scala Data Centers ensure that energy-hungry cloud and AI computing facilities are supplied by 100% wind power .
Environmental and Market Position: Serena frames its mission as “prosperity through energy”, emphasizing not just profits but positive impacts. The company’s renewable generation in 2024 avoided over 3.2 million tons of CO2 emissions since 2017 , and its capacity is enough to supply ~4.2 million households . It markets itself as a leader in sustainable energy with cutting-edge tech and strong ESG credentials, which aligns with Brazil’s push for decarbonization and corporate demand for green energy. Serena is also part of Brazil’s main stock indices (recently added to the IBrX index of top 100 stocks) and had been included in the Corporate Sustainability Index , reflecting its growing prominence. With long-term power purchase agreements (PPAs) locking in ~93% of its output through 2034 , Serena enjoys stable contracted cash flows. Its average PPA price in Brazil is around R$227/MWh, and it recently secured U.S. PPAs for its Texas wind at ~$41/MWh (including green credits) . The stable contracts, plus a culture of innovation (e.g. Serena developed digital platforms for energy management), give it a solid base to expand further. However, growth comes with heavy capital investments, which Serena has funded via debt and equity raises (including Actis’s infusions). This leads us to the company’s financial performance and what investors can expect in terms of returns.
Financial Performance and Shareholder Returns
Latest Results: Serena’s operational performance has been steadily improving. In 2Q 2025, the company produced 2,365 GWh of energy, a modest 2% increase year-on-year despite some curtailment issues on the grid. Revenues (gross energy profit) grew faster, thanks to higher contracted prices – 2Q25 energy gross profit was R$588.5 million, up +16% YoY . Importantly, profitability is rising with scale: EBITDA in 2Q25 reached R$421.6 million, a 26% jump vs. 2Q24 . This quarterly EBITDA was boosted by strong results from Serena’s energy trading desk (~R$70M profit) and better margins on new PPAs . For the first half 2025, consolidated EBITDA totaled R$732 million, up 4% YoY, and management noted that over 60% of the year’s EBITDA usually comes in the windier second half . Net income, however, remains in the red – Serena posted a net loss of R$60.6 million in 2Q25, though this was an improvement of R$37 million from the year-ago loss . High depreciation and interest expenses from its expansion projects weigh on the bottom line. On a cash basis, Serena actually generated positive “cash earnings” of R$111.4 million in the quarter by adding back non-cash charges . Operating cash flow was robust at R$375.5M in 2Q25 (+34% YoY) , reflecting the healthy EBITDA conversion to cash.
Leverage and Capital Structure: As a capital-intensive utility, Serena carries substantial debt. As of 2Q25, net debt stood at R$8.61 billion (approx USD ~$1.7B). Net debt is about 4.4× EBITDA (on a pro forma basis) – slightly down from 4.5× in Q1 and within its debt covenants (which allow up to 4.5×) . The company had R$1.52 billion in cash on hand after some debt paydown. Serena has been actively managing its capital: it did an asset swap with EDF Renewables in 1Q24, trading its stake in a solar complex (Pirapora) for full ownership of certain wind farms (Ventos da Bahia), which improved EBITDA but also meant taking on more operational assets . The high leverage means interest costs are significant – one reason net profits are still negative. However, Serena’s strategy is predicated on long-term growth; the company and its new sponsors (Actis/GIC) appear willing to sustain higher debt in order to build out new projects, under the expectation that cash flows will rise and eventually cover the financing. Notably, ratings agencies have assigned Serena (and its subsidiary Serena Geração) stable ratings (Serena Geração had a net debt/EBITDA of 3.3× standalone) .
Dividend Policy: Serena Energia currently does not pay dividends. The company has retained all earnings to reinvest in growth projects and service debt. In fact, its trailing 12-month dividend yield is 0.00% , and no distributions have been made in recent years. This contrasts with more mature Brazilian utilities that pay out a significant portion of profits. Serena’s management has signaled that near-term shareholder return will come via capital appreciation (rising share value as the company expands), rather than income. This makes Serena more suitable for investors with a long-term growth horizon rather than those seeking immediate dividend yield. It’s worth mentioning that Brazilian companies often have a legal requirement to distribute a percentage of profits as dividends – but since Serena has not reported significant profits, this hasn’t triggered payouts. Looking ahead, if and when Serena’s projects generate consistent earnings and its growth capex tapers, the company could initiate dividends. However, under the prospective new private ownership, any future dividend policy would depend on Actis/GIC’s strategy (often private infrastructure investors reinvest cash flows into further growth or debt reduction).
For now, investors in Serena should focus on capital gains potential. Indeed, Serena’s stock roughly doubled in the last year (from ~R$5 to ~R$12), reflecting the market’s recognition of its growing asset base and the premium offered in the take-private bid. Long-term investors who got in early have seen substantial appreciation, although future upside beyond the R$11.74 offer may be limited if the company is delisted. If the tender offer fails and Serena remains public, there could be renewed focus on its growth trajectory and eventually initiating dividends once profitable. But under the current scenario, cash returns to shareholders are nil and any payoff relies on share price movement or the buyout. International investors valuing total return (growth + future income) should weigh this profile: Serena is a growth play in renewables, not an income stock at this stage.
Valuation and Peer Comparison
Serena Energia can be evaluated against both Brazilian power companies and international renewable energy peers. On traditional metrics, Serena’s valuations reflect its high growth/low earnings status: the stock’s P/E ratio is not meaningful due to minimal net profits (trailing 12-month EPS was only R$0.01, yielding a triple-digit P/E) . A more useful metric is EV/EBITDA (enterprise value to EBITDA). Based on current price (~R$12) and debt, Serena’s EV/EBITDA is around 9–10× . This is in line with many utility and renewable companies. For instance, AES Brasil (AESB3), a Brazilian renewables-focused utility, trades near ~10.4× EV/EBITDA . Engie Brasil Energia (EGIE3), the largest private power producer in Brazil (with a more diversified generation portfolio), has a slightly lower multiple around ~8× EV/EBITDA and a trailing P/E of ~10–11 . Engie is profitable and pays dividends (yield ~5–6% ), so the market values it at ~10× earnings – whereas Serena, with no earnings or dividends yet, is valued more on EBITDA and asset growth potential.
It’s notable that Serena’s price-to-book ratio is moderate (~1.4× book), reflecting that its market cap (~R$7.5B) is only a bit above its equity book value (around R$5.3B) . This could imply the market isn’t pricing in excessive growth beyond the assets in place – possibly due to the take-private cap on upside. By comparison, many mature utilities trade near 1.0–2.0× book.
Looking internationally, renewable energy developers/utilities trade at a wide range of multiples. U.S. leader NextEra Energy (NEE), known for its renewables arm, has an EV/EBITDA around 16–17× and a P/E over 20 , reflecting investors’ willingness to pay a premium for its scale and consistent dividend growth. European clean energy utilities like Iberdrola trade closer to ~9× EV/EBITDA , similar to Serena’s range, but Iberdrola is profitable with ~4% dividend yield. Danish wind giant Ørsted has recently traded around 7–10× EV/EBITDA after a stock pullback . In general, Serena’s ~10× EV/EBITDA is roughly average – neither a deep bargain nor overvalued relative to peers. Its valuation seems to price in the secured cash flows from existing assets, but perhaps discounts the uncertain realization of its huge pipeline (and factors in Brazil country risk and Serena’s high leverage).
One should also consider Serena’s growth rate: EBITDA grew +26% in 2Q25 YoY and the company expects a second-half weighted year, so full-year growth could be strong. If Serena were to remain public, such growth could eventually compress its multiples (making it cheaper) or drive the share price higher. However, the R$11.74/share buyout effectively sets a ceiling unless a higher bid emerges. Indeed, UBS downgraded Serena to Neutral after the tender announcement, noting that R$11.74 is a fair value under the offer . For investors comparing peers, it’s important to recognize that Serena’s stock price is now tightly linked to that offer rather than fundamentals alone.
Peer Performance: In terms of stock performance, Serena (SRNA3) has outpaced the local utility index in 2023–2025 due to its growth and M&A speculation (over +120% YTD 2025) . Engie Brasil’s stock, by contrast, is up ~15% in 2025 with steady performance . If we look at total return, Engie offers ~5% yield plus modest growth, whereas Serena delivered pure appreciation (but with higher volatility and no yield). For a long-term foreign investor, a mix of such stocks might be considered: Serena for high growth (but now with corporate event risk) and an Engie or CPFL Energia (CPFE3) for stable dividends (CPFL, a Brazilian utility owned by State Grid of China, yields ~6–7% and trades around 7–8× earnings) . Serena’s unique appeal was being one of the few pure renewable plays in Brazil – most other listed players are diversified utilities or subsidiaries of multinational power companies. This purity made Serena comparable to independent power producers abroad and likely contributed to Actis/GIC seeing strategic value worth taking private.
In summary, Serena’s valuation metrics are mid-range: its enterprise value is about 10 times its annual EBITDA, similar to local peers like AES Brasil and cheaper than top global renewable stocks. However, Serena’s lack of current earnings and dividends means traditional multiples like P/E and yield are unfavorable (essentially 0% yield and 1000+ P/E). Investors are betting on future earnings growth, which the new owners evidently believe in. If Serena were to remain public and execute its pipeline (potentially doubling or tripling capacity in coming years), there could be significant upside, but those scenarios may now accrue to private equity rather than public shareholders if the buyout closes.
How to Invest: ADRs, Foreign Access, and Tax Implications
ADR Availability: As of 2025, Serena Energia does not have a U.S.-listed ADR on the NYSE or NASDAQ. There is no Level-1 OTC ADR readily quoted, either. Foreign investors who wish to invest directly in Serena must typically buy the Brazilian shares (SRNA3) on the B3 exchange in São Paulo. Some international brokers (such as Interactive Brokers) provide access to B3 trading for foreign clients. Alternatively, one could invest via Brazilian-focused ETFs or funds that hold Serena – for example, Serena is included in certain emerging market small-cap indices and ETFs (it was added to the MSCI and STOXX Brazil indexes in mid-2025) . However, with the pending take-private, liquidity in the stock may diminish as the free float gets absorbed. If the tender offer succeeds, Serena’s stock would be delisted and cease to trade; in that case, foreign investors would receive the cash offer (R$11.74 per share) for their shares if they participated in the tender.
For foreign investors keen on Brazilian equities in general, the usual route is to register as a foreign investor under Brazil’s Resolution 4,373, or use global brokers that handle the custody via a local participant. If Serena were to eventually issue an ADR, it would simplify access, but given the current trajectory to go private, an ADR is unlikely to materialize.
Tax Considerations: Brazil’s tax regime has historically been friendly to foreign portfolio investors in stocks. Currently, dividends paid by Brazilian companies are tax-free (0% withholding tax) for both resident and non-resident investors . This has been the case for years – companies pay corporate income tax on profits, but dividends are not taxed at distribution. There is discussion of tax reform (a proposal to impose a 10% tax on dividends to non-residents was floated in 2025) , but as of now no such tax is in effect. If Brazil does implement a dividend withholding tax (e.g. 10%), foreign ADR or stockholders would receive dividends net of that tax, with potential relief via tax treaties or credits in their home country. In Serena’s specific case, the lack of dividends means there’s no current income to worry about.
For capital gains, Brazil exempts foreign investors (not domiciled in tax-haven jurisdictions) from capital gains tax on trades of Brazilian stocks made on the exchange . That means if an international investor buys shares of Serena on B3 and later sells at a profit, Brazil does not levy capital gains tax (assuming the investor is registered appropriately under 4,373 rules). This exemption is designed to encourage foreign investment. Note that if an investor sells shares in the tender offer, that is effectively a sale on the exchange – such gains should also be exempt for a qualified foreign investor. One caveat: if an investor is based in a country deemed a tax haven by Brazil, a 15% capital gains tax may apply. Also, if one were to trade via an unsponsored ADR (if it existed), generally the ADR bank would handle any Brazilian taxes equivalently.
Other Taxes: Brazil eliminated the “interest on equity” (JCP) mechanism in recent tax changes, so companies like Serena no longer pay JCP (which was previously taxed at 15% to foreigners). Transaction taxes like the IOF (financial transactions tax) on currency exchange are minimal for stock investments (often IOF is 0% for foreign equity inflows). Thus, the primary tax consideration for a foreign equity investor in Brazil is dividend withholding (currently none) and ensuring proper registration to get the capital gains exemption. Investors should also be mindful of their own country’s taxation – e.g. U.S. investors would owe U.S. tax on gains or foreign dividends, with Brazil’s treaty potentially allowing a credit if Brazilian tax were paid.
In summary, foreign investors can invest in Serena by buying SRNA3 shares on the Brazilian market (no ADR exists), and Brazil offers attractive tax terms: no local tax on dividends or on capital gains for non-residents . If Serena remains public in some form, an international investor with a long-term horizon could hold the stock and eventually benefit from both price appreciation and potential future dividends, with limited Brazilian tax drag. However, given the looming privatization, one should factor in the likelihood of receiving cash and possibly needing to redeploy it into other investments if the stock is delisted.
Conclusion: Long-Term Outlook and Considerations
Serena Energia represents a unique growth story in the renewable energy sector – one that has attracted global investors for its clean energy focus and long-term contracted cash flows. For a long-term investor, Serena offered the prospect of capital appreciation through aggressive capacity expansion in wind and solar, tapping into the secular trend of decarbonization. The company’s partnerships to power AI and cloud data centers show it is positioning for future demand niches, potentially ensuring high utilization of new projects. In terms of fundamentals, Serena has been improving operationally (with rising EBITDA and narrowing losses) , and its large project pipeline could drive significant growth in the coming years. On the flip side, Serena carries high debt and hasn’t reached the point of paying dividends – so it required patience from investors purely seeking long-term value creation rather than immediate income.
At this juncture, the pending Actis/GIC buyout is the dominant factor in Serena’s outlook. If the transaction closes, current shareholders will cash out at R$11.74, locking in their gains. Long-term foreign investors would then need to look to the private markets or wait for a potential future IPO (if the sponsors decide to relist the company after scaling it further) to participate in Serena’s journey. If, for some reason, the deal does not go through, Serena’s stock could remain listed and potentially benefit from its growth trajectory – though the market might then demand clearer progress toward profitability or dividends to justify further price increases beyond the ~R$12 level. The company’s inclusion in indices and its liquidity could improve if it stays public, and management might consider strategies to reward shareholders (e.g. moderate dividends) once major capex projects are completed.
From a peer comparison standpoint, Serena’s risk/reward profile is distinct. Local peers like Engie Brasil or CPFL offer steady dividends and lower volatility, suitable for income-focused investors. International peers like NextEra offer a blend of growth and yield but at higher valuation multiples. Serena was a play on Brazil’s abundant wind/solar resources with higher growth potential – and indeed delivered on that with a 20× EBITDA increase since IPO and a rapidly expanding asset base . The fact that sophisticated investors are taking it private can be seen as validation of its long-term value (they likely see further upside in Serena’s projects that the public market wasn’t fully pricing in). However, it also means the easy money may have been made for public investors via the takeover premium.
Investment Takeaway: For a foreign investor with a long-term horizon interested in Brazilian renewables, Serena Energia has been a compelling story of capital appreciation driven by growth (and no dividends so far) . Its expansion into supplying clean energy for AI data centers highlights forward-looking strategic thinking , and its robust pipeline could translate into substantial future earnings. Yet, any new investment in Serena’s stock at this point must carefully consider the takeover situation. If one believes the deal will close, upside is capped (around the offer price), and the main concern is ensuring participation in the tender. If one believes the deal won’t close (or is willing to bet on a higher bid), then Serena might trade on fundamentals again – in which case its value would hinge on executing growth and eventually initiating shareholder returns via earnings and dividends.
Tax-wise, the lack of Brazilian withholding taxes is a bonus for international investors (especially compared to many other emerging markets), meaning any future dividends from Serena (if instituted) would likely be received gross . Capital gains on Serena’s stock, such as the gain many investors have made with the stock’s rally, are not taxed by Brazil for foreigners , making it an efficient investment from a tax perspective (one would only handle taxes in their home jurisdiction).
In conclusion, Serena Energia has offered a case study in Brazil’s renewable energy opportunity – combining strong local growth with global investment interest. It delivered on long-term capital appreciation, though dividends remain a future prospect rather than a current reality. Investors who got in early have been rewarded by the market’s re-rating of the company (and now a buyout offer). Going forward, Serena’s expansion plans (wind, solar, storage across the Americas) and its role in powering emerging industries (like AI data centers) bode well for its business sustainability and growth. The question for investors is whether these benefits will be realized within the public markets or behind private doors. For now, any foreign investor considering Serena must navigate the merger event – but can take comfort in knowing that Brazil’s policy environment (e.g. tax incentives and demand for clean energy) provides a favorable backdrop if they are able to participate in similar opportunities in the sector. Serena Energia’s story ultimately highlights both the promise and the challenges of long-horizon investing in emerging market clean energy – significant growth and value creation are possible, but one must be adaptable to corporate changes and have a clear strategy for entry and exit in such investments.
Sources: Serena Energia Company Profile ; Serena Investor Relations (2Q25 Earnings Release) ; Reuters/Investing (Tender Offer details) ; Scala Data Centers Partnership PR ; Aligned/ODATA Partnership Announcement ; Investing.com/StockAnalysis (Valuation metrics) ; B3 Tax Guidelines ; Yahoo Finance/MarketScreener (Peer dividend and P/E data) .
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