Canaccord - Tuesday March 26, 2013 AltaGas (ALA) announced it has entered into a purchase and sale
agreement with affiliates of LS Power Equity Advisors, LLC to acquire
Blythe Energy, LLC, which owns a 507 MW natural gas-fired combined
cycle plant and a related 230 kV 67-mile electric transmission line in
Southern California, for US$515 million.
AltaGas* (ALA : TSX : $34.89), Net Change: -1.15, % Change: -3.19%, Volume: 2,103,409
Just in time for Easter. AltaGas has entered into a purchase and sale agreement with affiliates of LS Power Equity Advisors,
LLC to acquire Blythe Energy, LLC, which owns a 507 MW natural gas-fired combined cycle plant and a related 230 kV 67-
mile electric transmission line in Southern California, for US$515 million. The Blythe Energy Center is contracted under a
Power Purchase Agreement (PPA) through to July 2020 with Southern California Edison. Contract provisions match PPA
revenues to all major plant costs. The Blythe Energy Center is well positioned upon expiry of the PPA in 2020 to contract with
other market participants due to its location and ability to serve both the California Independent System Operator and Desert
Southwest markets. The demand for cleaner energy sources, including natural gas, continues to be strong across North America
and is a key driver for potential future growth of the Blythe Energy Center. Blythe is located on an owned 76-acre site which
provides a significant geographic footprint for potential future expansion. "The Acquisition of Blythe is an important addition to
our power business. The power purchase agreement provides stable earnings and cash flow and with the infrastructure in place
today, the facility is well positioned to access two premium power markets in California and Arizona in the future," said David
Cornhill, Chairman and CEO of AltaGas. "The addition of natural gas-fired power generation to our energy infrastructure
portfolio in the U.S. provides another platform for growth to meet the increasing demand for clean sources of energy." The
acquisition is expected to be accretive to AltaGas’ earnings and cash flow per share in 2014, the first full year of ownership, and
is expected to add approximately $50 million in incremental contracted EBITDA per year. In connection with the acquisition,
AltaGas has entered into an $405 million (including over-allotment option) bought deal equity offering with a syndicate of
underwriters at $34.90 per common share. The offering will be used, in part, to fund the acquisition as well as for general
corporate purposes and to support future growth initiatives, including those related to AltaGas' energy export business
conducted through its AltaGas Idemitsu Joint Venture Limited Partnership. The transaction is subject to customary approvals
including regulatory approvals and is expected to close in Q2/13.