Canadian Energy Firms Announce Merger Plans
David Wagman | October 30, 2017Innergex Renewable Energy Inc. will buy Alterra Power Corp. for C$1.1 billion ($860 million), including the assumption of Alterra's debt.
The acquisition price of C$8.25 ($6.44) per share of Alterra stock implies a premium of 58 percent to Alterra's 20-day volume weighted average price of C$5.21 as of Oct. 27, 2017.
The deal accelerates Innergex's plan to reach a net installed capacity of over 2,000 MW by 2020, said Michel Letellier, president and CEO in a statement. It also diversifies Innergex's asset base by adding operating hydro and wind projects in Canada; a number of operating, under construction and prospective wind projects in the U.S.; and operating geothermal assets in Iceland.
Innergex develops, owns and operates run-of-river hydroelectric facilities, wind farms and solar photovoltaic farms in Quebec, Ontario and British Columbia, Canada, France and Idaho. Its portfolio currently consists of interests in 52 operating facilities with an aggregate net installed capacity of 1,078 MW (gross 1,781 MW), including 31 hydroelectric facilities, 20 wind farms and one solar farm.
It also holds interests in two projects under construction with a net installed capacity of 46 MW (gross 66 MW), for which power purchase agreements have been secured. The company lists prospective projects with an aggregate net capacity totaling 3,560 MW (gross 3,940 MW).
Alterra Power Corp. is a global renewable energy company that manages operations of eight power plants totaling 825 MW of hydro, wind, geothermal and solar generation capacity in Canada, the U.S. and Iceland.
Alterra is building the 200 MW Flat Top wind project in central Texas, which is expected to be in operation by mid-2018 (51 percent owned by Alterra). Upon completion, Alterra will operate nine power plants totaling 1,025 MW of capacity and will own a 465 MW share of this capacity.
(Read "Texas Wind Farm Secures Financing.")
The deal will be funded and supported by a new C$150 million subordinated unsecured loan from Caisse de dépôt et placement du Québec ("la Caisse"); commitments obtained from two leading Canadian banks to backstop; and increase of Innergex's existing credit facility up to C$700 million.