TransAlta Renewables Inc. acquired an economic stake in a 71-MW portfolio of wind and solar facilities in the U.S. and the entire 20-MW Kent Breeze wind farm in Ontario from TransAlta Corp. for C$166 million.
The purchase price includes the assumption of C$62 million of tax equity obligations and project debt. The equity value of C$104 million represents a 10x multiple of cash available for distribution and is expected to be accretive on a per-share basis.
TransAlta Renewables plans to fund the equity value portion of the acquisition using existing liquidity.
The three assets have an average weighted contract life of 15 years. The transaction involves the 50-MW Lakeswind Power Plant in Minnesota and Braley Road 2 Solar Project, Dartmouth Solar Project, Freetown Solar Project and North Brookfield Solar facilities in Massachusetts; and the 10-MW Kent Breeze Wind Farm 1 and the 10-MW Kent Breeze Wind Farm 2 in Ontario.
"The acquired assets are a natural fit for TransAlta Renewables which focuses on diversified, highly contracted cash flows from strong counterparties," said John Kousinioris, president of TransAlta Renewables. "These drop-downs, along with the two recent U.S. wind projects, demonstrate our ability to execute on accretive, renewable acquisitions."
Additionally, TransAlta Renewables' board approved a dividend reinvestment plan for eligible Canadian shareholders to reinvest monthly dividends into additional common shares of the company, starting with the dividend payable July 31 to shareholders of record July 13.
