Vistra Energy has entered into a definitive agreement with Crius Energy Trust to acquire Crius Energy for C$7.57 ($5.69) in cash for each trust unit.
Vistra intends to fund the $328m purchase price with cash on hand. It will also assume Crius Energy’s net debt of approximately $108m.
The cash consideration of C$7.57 per unit represents around 38% premium to Crius Energy’s each unit price of C$5.48 as of market close on 6 February 2019.
In addition to the purchase price, Crius Energy unitholders will also get an earlier-declared amount of C$0.209 per unit for total consideration of C$7.779 per unit in the first quarter of 2019.
Vistra president and CEO Curt Morgan said: “We are excited to announce this transaction, which will accelerate Vistra’s retail growth expansion plans via the acquisition of a high-quality electricity and gas retailer serving primarily residential and small business customers.
“The Crius Energy portfolio has a high degree of overlap with Vistra’s generation fleet and complements Vistra’s existing municipal aggregation and large commercial and industrial portfolio in the Midwest and Northeast markets. We welcome the Crius Energy team to the Vistra family.”
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This deal was unanimously recommended by the independent directors of Crius Energy, and unanimously approved by Crius Energy’s board of directors.
Crius Energy board of directors chairman Brian Burden said: “We are pleased to announce this transaction and are confident that it is in the best interests of our unitholders and other stakeholders.
“This transaction is the result of an exhaustive review of strategic alternatives undertaken by our Board of Directors, with the assistance of outside advisors, to maximize unitholder value and unlock the company’s intrinsic value, while eliminating execution risk. We are confident that this transaction represents the best outcome for our unitholders and other stakeholders and look forward to completing the transaction.”
Vistra serves approximately 2.9 million customers and has more than 40GW of generation.
This deal is in line with Vistra’s strategy to boost its retail business and speed up its growth in the Midwest and Northeast regions.
Crius Energy has presence in 19 states and the District of Columbia. It sells electricity and natural gas products to residential and small business customers.
The deal would see a high degree of overlap with Vistra’s generation fleet. Around 11.6TWhs of load would be acquired, thereby bolstering Vistra’s match of its generation to load profile to around 45%.
The deal, which has been structured in a way as a divestment of two wholly owned subsidiaries of Crius Energy that indirectly own the business, is subject to the approval of at least two-thirds of Crius Energy’s unitholders.
Following regulatory and other necessary approvals, the deal is expected to close in the second quarter of 2019.