Canadian business news: Innergex Renewable acquiring Alterra Power

Innergex Renewable Energy Inc. and Alterra Power Corp. have entered into an agreement under which Innergex will acquire all of the issued and outstanding common shares of Alterra for an “aggregate consideration” of $1.1 billion.

This sum includes assumption of Alterra’s debt.

Innergex says this transaction will “meaningfully diversify [its] asset portfolio in terms of geography and energy sources.” Acquiring Alterra will add eight operating projects with a net capacity of 364 MW, along with three projects under construction with net 118 MW capacity, three prospective projects “at an advanced stage” with net 686 MW capacity, “other U.S. PTC-qualified prospective projects” with net 490 MW capacity, and “an extensive pipeline of prospective projects in preliminary stages or in progress” with net 4,350 MW capacity.

“This transaction is highly strategic and accretive for Innergex as we believe it significantly accelerates Innergex’s growth profile with a path to reach a net installed capacity of over 2,000 MW by 2020,” said Michel Letellier, president and chief executive officer of Innergex.

When the transaction is complete, Innergex’s overall net power generation capacity will be 1,606 MW, an increase of more than 40%. Specific to hydro, Alterra owns the 147-MW East Toba, 88-MW Montrose Creek and 62-MW Jimmie Creek projects in Canada. The company also has the 10-MW Bruarvirkjun hydro project under construction in Iceland.

Innergex’s 25.3-MW Boulder Creek hydro plant in British Columbia began commercial operation in May 2017. The company has interests in 51 operating facilities, including 31 hydroelectric plants.

Financial details

Alterra shareholders will receive an aggregate consideration that will consist of about 25% in cash and 75% in common shares of Innergex.

Innergex this transaction is to be fully funded and supported by a new subordinated unsecured loan from Caisse de depot et placement du Quebec. A press release indicates commitments have been obtained from two leading Canadian banks to “backstop and upsize Innergex’s existing credit facility in order to maintain a strong and flexible balance sheet and provide ample liquidity to fully fund Innergex’s development portfolio pro forma for the transaction.

The transaction is subject to approval by Alterra’s shareholders and other customary closing conditions.

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