I Squared Capital has bought shares in Atlantic Power with a total enterprise value of $961m, making it the majority owner.
The deal involves the acquisition of outstanding common and preferred shares, as well as convertible debentures. I Squared Capital will also acquire medium-term notes of certain Atlantic Power subsidiaries.
Atlantic Power president and CEO James J Moore said: “The all-cash price of $3.03 per common share represents a significant premium to our recent trading levels.
“As our fellow shareholders know, the future value of our shares is highly dependent on power prices and re-contracting outcomes for several major power purchase agreements that are expiring in the next three to five years.
“The acquisition of our shares for cash would remove this uncertainty for investors and provide immediate and significant cash value. We have carefully considered the offer and we encourage our fellow shareholders to join management and the board in voting to approve this transaction.”
Atlantic Power’s board of directors unanimously approved the transaction.
As an independent power producer (IPP), Atlantic Power owns 11 power generation assets in the US and two provinces of Canada.
It sells electricity and steam to investment-grade utilities and other large customers under long term power purchase agreements.
I Squared Capital partner Thomas Lefebvre said: “We are excited to partner with James Moore and the management team, who have made great progress over the past several years in improving the company’s balance sheet and leverage ratio while addressing operational challenges.
“Atlantic Power has an attractive portfolio of assets that I Squared Capital is well positioned to manage and we look forward to working together.”