In some renewable industry consolidation, Atlantic Power (NYSE: AT) said Nov. 16 that it has agreed to a deal with Veolia Environnement SA to buy acquire the outstanding shares of Ridgeline Energy Holdings.
Ridgeline is currently a wholly-owned subsidiary of Eolfi SA, a renewable power development company majority owned by Veolia.
The total cost of the acquisition will be approximately $88m, subject to working capital adjustments. The company currently intends to fund the acquisition from the net proceeds of a planned issuance of convertible debt.
“The Acquisition will add interests in three wind projects totaling 150 net MW, two in operation and one completing construction by year end,” said Atlantic Power President and CEO Barry Welch.
“These projects have 20-year and 25-year power purchase agreements (PPAs) with investment grade off-takers, and are expected to generate $9 to $12 million of operating cash flow per year starting in 2013,” Welch said. “In addition, the Company will acquire Ridgeline’s development pipeline, which includes approximately 1,000 MW of solar and wind projects,” said the Atlantic Power facility.”
Ridgeline Energy currently has a wind and solar development pipeline of more than 20 projects in the U.S. totaling approximately 1,000 MW.
Planned development expenditures in 2013 are focused on near-term opportunities where PPAs can be obtained quickly, including solar sites where investment tax credits remain available and construction could be completed as early as the first quarter of 2014. Wind development viability will depend on continued support from renewable portfolio standards in more than 30 states and a possible extension of production tax credits, Atlantic Power said.
The deal is subject to approval from the Federal Energy Regulatory Commission (FERC) as well as other regulatory agencies. In addition to customary closing conditions, the acquisition closing is subject to Atlantic obtaining financing and the Meadow Creek project achieving certain commercial operating milestones. The Acquisition is expected to close on or before Dec. 31, 2012.
Meadow Creek, is a 120 MW wind project currently under construction in Idaho, with a commercial operation date expected in December.
Atlantic Power is a leading publicly traded, power generation and infrastructure company with a well-diversified portfolio of assets in the United States and Canada.