OAKVILLE, ONTARIO — (Marketwired) — 11/01/17 —
Algonquin Power & Utilities Corp. (TSX: AQN)(NYSE: AQN) (“APUC” or “Algonquin”) announced today that it has entered into an agreement to create a joint venture (“AAGES”) with Seville, Spain-based Abengoa, S.A. (MCE: ABG) (“Abengoa”) to identify, develop, and construct clean energy and water infrastructure assets with a global focus.
Concurrently with the creation of the AAGES joint venture, APUC has entered into a definitive agreement to purchase from Abengoa a 25% equity interest in Atlantica Yield plc (NASDAQ: ABY) (“Atlantica”) for a total purchase price of approx. US $608 million, based on a price of US $24.25 per ordinary share of Atlantica plus a contingent payment of up to US $0.60 per-share payable two years after closing, subject to certain conditions. The transaction is expected to close in the first quarter of 2018, subject to regulatory approvals and other closing conditions. No shareholder approvals are required.
“The formation of the AAGES joint venture with Abengoa and our investment in Atlantica are important first steps of Algonquin–s strategy to enter markets outside of Canada and the United States,” commented Ian Robertson, Chief Executive Officer of APUC. “AAGES provides a unique opportunity for APUC to grow in selected international markets with a proven, experienced partner, and to access a deep pipeline of new opportunities which will create enduring value for our shareholders. The investment in Atlantica is expected to be immediately accretive, complementary to our existing portfolio, and further supports our long-term dividend growth objectives.”
Atlantica owns and operates a geographically diverse, long-term contracted portfolio of 21 facilities representing 1.7 GW of clean power generating capacity, 1,770 kilometers of electric transmission lines, and two desalination plants in selected global markets including North America, South America, Europe and Africa. APUC–s commitment to Atlantica is expected to strengthen Atlantica–s prospects through the addition of new assets, thereby accelerating the growth of its cash available for distribution. The projects expected to be undertaken by AAGES under a new right of first offer agreement represent an important source of future growth for Atlantica.
Strategic Rationale
The strategic rationale underlying the transaction includes:
(1) Regulated in the case of Spain
(2) As of December 31, 2016
Financing of the Transaction
APUC will purchase a 25% interest in Atlantica based on a per-share price of US $24.25 plus a contingent payment of up to US $0.60 per-share payable two years after closing subject to certain conditions. The total investment cost of approx. US $608 million will be partially financed through a concurrent bought deal $500 million common equity offering of APUC shares, and debt or preferred shares issued consistent with APUC–s capital structure and target credit metrics. In connection with the proposed transaction, APUC expects no changes to its BBB (stable) credit rating by S&P.
Advisors
Raymond James Ltd. acted as lead financial advisor and Scotia Capital also acted as financial advisor to APUC. Husch Blackwell and Pinsent Masons acted as legal advisors to APUC.
Teleconference Call
APUC will host a conference call for investors and analysts at 5:15 p.m. Eastern Time on Wednesday, November 1, 2017 to discuss the Transaction.
Conference call details:
Date: Wednesday, November 1, 2017
Start Time: 5:15 p.m. Eastern Time
Phone Number: Toll free within North America: 1-866-769-3843 or Toronto: 437-828-0101
Conference ID: Please ask to join the Algonquin Power & Utilities Corp. conference call
Presentation Access:
For those unable to attend the live call, a digital recording will be available for replay two hours after the call by dialing 1-855-669-9658 or 1-604-674-8052, access code 1850, from November 1, 2017 until November 15, 2017. The webcast presentation will remain accessible via the URL above or APUC–s website at .
About Algonquin Power & Utilities Corp.
APUC is a diversified generation, transmission and distribution utility with over $10 billion of total assets in the United States and Canada representing more than 1,250 MW of installed capacity. Through its two business groups, APUC provides rate regulated natural gas, water, and electricity generation, transmission, and distribution utility services to over 750,000 customers in the United States, and is committed to being a global leader in the generation of clean energy through its portfolio of long-term contracted wind, solar and hydroelectric generating facilities. APUC delivers continuing growth through an expanding pipeline of renewable energy development projects, organic growth within its rate regulated generation, distribution and transmission businesses, and the pursuit of accretive acquisitions. Common shares and preferred shares are traded on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A, and AQN.PR.D. APUC–s common shares are also listed on the New York Stock Exchange under the symbol AQN.
Visit APUC at and follow us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information
Certain statements included in this news release contain information that is forward-looking within the meaning of applicable securities laws, including information and statements regarding APUC–s proposed indirect acquisition of Atlantica ordinary shares, the completion of the proposed transactions, benefits of the proposed transactions, including the investment in Atlantica and the joint venture with Abengoa. 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 the management–s discussion and analysis section of APUC–s most recent annual report, quarterly report, and APUC–s Annual Information Form. 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 or information to reflect new information, subsequent or otherwise.
Contacts:
Investor Enquiries, please contact:
Ian Tharp
Vice President, Investor Relations
Algonquin Power & Utilities Corp.
905-465-6770
Media Enquiries, please contact:
Alison Holditch
Investor Relations and Communications Specialist
Algonquin Power & Utilities Corp.
905-465-6748