Transaction continues APUC's growth program through further
expansion of its regulated utility business in a high quality
jurisdiction
This news release constitutes a "designated news release" for
the purposes of APUC's prospectus supplement dated February 28, 2019 to its short form base shelf
prospectus dated September 18,
2018.
Highlights:
- Algonquin Power & Utilities Corp. ("APUC") to acquire 100%
of the issued and outstanding common shares of Ascendant Group
Limited ("Ascendant"), parent company of Bermuda Electric Light
Company, serving Bermuda's 63,000
residents and businesses
- Equity acquisition price of U.S. $365
million, expected to be immediately accretive to APUC's 2020
earnings per share
- Implied expected closing net enterprise value of U.S.
$470 million represents an attractive
7.3x multiple of forecast 2020 EBITDA
- High-quality regulated utility acquisition represents continued
execution of APUC's international expansion strategy
- Consistent with APUC's commitment to growth and sustainability,
this acquisition provides the opportunity to capitalize on APUC's
core competencies of responsible utility ownership and renewable
energy development for the economic and environmental benefit of
Bermuda
- Ascendant will maintain its headquarters in Bermuda after the acquisition. APUC is
committed to retaining and developing the existing experienced
management and talented operations team to continue providing
customers with safe, reliable and cost effective utility
services
- Transaction closing is expected to occur in late 2019,
following receipt of shareholder and regulatory approvals
OAKVILLE, ON, June 3, 2019 /CNW/ - Algonquin Power &
Utilities Corp. ("APUC") (TSX/ NYSE:AQN) announced the execution of
an implementation agreement with the Ascendant Group Limited
("Ascendant") (BSX:AGL.BH) pursuant to which APUC's international
power and utilities investment platform, AAGES, is expected to
acquire Ascendant and its subsidiaries (the "Transaction").
Ascendant, through its major subsidiary, Bermuda Electric Light
Company, is the sole electric utility providing safe and reliable
regulated electrical generation, transmission and distribution
services to Bermuda.
Under the terms of the all-cash transaction, which has been
unanimously approved by the Board of Directors of each company,
Ascendant's shareholders will receive U.S. $36.00 per common share, representing an
aggregate share purchase price of approximately U.S. $365 million.
"The acquisition of Bermuda Electric Light Company builds
materially on our international growth program through the addition
of this high-quality utility, an acquisition which will be
immediately accretive to earnings," said Ian Robertson, Chief Executive Officer of APUC.
"In addition to Ascendant customer and employee benefits coming
from the scale of our existing utility operations, we are confident
that our demonstrated capability in renewable energy development
can help Bermuda realize on its
carbon reduction aspirations."
Continuing Commitment to Our Communities, Customers and
Employees
APUC will work closely with the Bermuda Government and the
Regulatory Authority to ensure a seamless transition so that the
residents and businesses of Bermuda will continue to receive the same
safe, reliable and cost effective utility service that they
currently enjoy. APUC is committed to maintaining the
existing local management and operations teams. Customers
should not expect any impact to rates from the acquisition. AAGES'
project implementation experience is available to support the major
generation rehabilitation program underway at Ascendant and help
accelerate Bermuda's commitment to
reducing carbon intensity.
Investment Grade Financing Plan
The financing plan for the Transaction is expected to be
consistent with APUC's current credit profile and strong investment
grade credit ratings. Closing of the Transaction is expected
to occur in late 2019 and is subject to customary closing
conditions, including the approval of Ascendant's common
shareholders, and the receipt of certain regulatory and government
approvals in Bermuda.
For more transaction details, see the fact sheet located at
http://investors.algonquinpower.com/MNA
Raymond James Ltd. acted as financial advisor, Husch Blackwell
LLP acted as corporate legal counsel, and Conyers Dill & Pearman acted as local legal
counsel to APUC.
About Algonquin Power & Utilities Corp.
APUC is a diversified international generation, transmission and
distribution utility with approximately U.S. $10 billion of total assets. Through its two
business groups, APUC is committed to providing safe, reliable and
cost effective rate-regulated natural gas, water, and electricity
generation, transmission and distribution utility services to
nearly 800,000 connections in the United
States and Canada, and is a
global leader in renewable energy through its portfolio of
long-term contracted wind, solar and hydroelectric generating
facilities representing over 2.5 GW of net installed capacity and
more than 500 MW of incremental renewable energy capacity under
construction. APUC delivers continuing growth through an
expanding global pipeline of renewable energy, electric
transmission, and water infrastructure development projects,
organic growth within its rate-regulated generation, distribution
and transmission businesses, and the pursuit of accretive
acquisitions. APUC's common shares, Series A preferred shares, and
Series D preferred shares are listed on the Toronto Stock Exchange
under the symbols AQN, AQN.PR.A, and AQN.PR.D. APUC's common shares
and Series 2018-A subordinated notes are also listed on the New
York Stock Exchange under the symbols AQN and AQNA.
Visit APUC at www.algonquinpowerandutilities.com and
follow us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information
Certain statements included in this news release constitute
''forward-looking information'' within the meaning of applicable
securities laws in each of the provinces of Canada and the respective policies,
regulations and rules under such laws and ''forward-looking
statements'' within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 (collectively, ''forward-looking
statements"). The words "will", "expects", "intends" and similar
expressions are often intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Specific forward-looking statements
contained in this news release include, but are not limited to:
statements regarding expected earnings and cash flow accretion,
expected financing plan and impact on credit metrics, expectations
regarding Ascendant employees and community engagement, the
completion and benefits of the proposed transaction (including the
involvement of AAGES), anticipated Ascendant dividends,
expectations regarding Ascendant's continuing operations, and
funding for the transaction. These statements are based on factors
or assumptions that were applied in drawing a conclusion or making
a forecast or projection, including assumptions based on historical
trends, current conditions and expected future developments. Since
forward-looking statements relate to future events and conditions,
by their very nature they require making assumptions and involve
inherent risks and uncertainties. APUC cautions that although it is
believed that the assumptions are reasonable in the circumstances,
these risks and uncertainties give rise to the possibility that
actual results may differ materially from the expectations set out
in the forward-looking statements. Material risk factors include
those set out in APUC's most recent annual and interim management's
discussion and analysis, most recent annual information form and
prospectus and prospectus supplement relating to the offering.
Given these risks, undue reliance should not be placed on these
forward-looking statements, which apply only as of their dates.
Other than as specifically required by law, APUC undertakes no
obligation to update any forward-looking statements to reflect new
information, subsequent or otherwise.
Non-GAAP Financial Measures
The term "earnings before interest, taxes, depreciation and
amortization" ("EBITDA") may be used in this document. EBITDA is
not a recognized measure under GAAP. There is no standardized
measure of EBITDA, consequently APUC's method of calculating this
measure may differ from methods used by other companies and
therefore may not be comparable to similar measures presented by
other companies. A calculation and analysis of EBITDA can be found
in APUC's most recent Management Discussion & Analysis.
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SOURCE Algonquin Power & Utilities Corp.