Receive our newsletter – data, insights and analysis delivered to you
  1. News
February 9, 2021

Drax Group to acquire Pinnacle Renewable Energy for $652m

Drax Group and one of its subsidiaries have agreed to acquire Pinnacle Renewable Energy for a cash sum of $652m (C$831m).

By Umesh Ellichipuram

Drax Group and one of its subsidiaries have agreed to acquire Pinnacle Renewable Energy for a cash sum of $652m (C$831m).

The group company, along with Drax Canadian Holdings, has signed a definitive arrangement to purchase all issued and outstanding common shares. The deal includes the assumption of net debt and Pinnacle’s non-controlling interests in its joint ventures.

Pinnacle Renewable Energy CEO Duncan Davies said: “Pinnacle’s board of directors has unanimously determined that the transaction represents the best course of action for the company and its shareholders.

“On closing, the transaction will deliver immediate, significant, and certain cash value to our shareholders.

“At the same time, the combination of Pinnacle and Drax will create a global leader in sustainable biomass with the vision, technical expertise and financial strength to help meet the growing demand for renewable energy products around the world.”

Pinnacle shareholders have entered into voting support agreements in favour of the deal. This includes Canadian investment firm ONCAP, which owns 36% of the outstanding Pinnacle shares. According to the agreement, Pinnacle shareholders will receive $8.88 (C$11.30) per share in cash.

Content from our partners
Green investment: What gives Scotland multiple advantages
How Hengst helped to keep Germany’s charity “star singers” shining
How one power station prevented frequent shutdowns with three-stage air filtration

Apart from shareholder approvals, the closing of the deal is subject to governmental and regulatory approvals and the approval of the Supreme Court of British Columbia.

Pinnacle said that the transaction will be implemented pursuant to a plan of arrangement under the Business Corporations Act (British Columbia).

Completion of the deal is not subject to a financing condition and is expected to take place in the second or third quarter of this year.

Drax CEO Will Gardiner said: “I am excited about this deal which will reinforce Drax’s position as the world’s leading sustainable biomass generation and supply business, delivering against our strategy to increase self-supply, reduce our biomass production cost and create a long-term future for sustainable biomass.

“We expect to benefit greatly from Pinnacle’s operational and commercial expertise, and I am looking forward to what we can achieve together.”

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Wednesday. The power industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU