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TransAlta Corporation owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia. It provides municipalities, medium and large industries, businesses and utility customers with affordable, energy-efficient and reliable power. It also produces wind power and hydro-electric power. Its segments include Hydro, Wind & Solar, Gas... see more

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TSX:TA - Post Discussion

TransAlta Corp > TransAlta to Acquire Heartland Generation

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Post by Betteryear2 on Nov 02, 2023 10:55am

TransAlta to Acquire Heartland Generation

CALGARY, AB, Nov. 2, 2023 /CNW/ -

Highlights

Highly accretive to free cash flow and cash yield upon closing with approximately 55% of revenues contracted with a weighted-average remaining life of 16 years
Transaction valued at approximately $658 million, inclusive of the assumption of $268 million of low-cost debt, with an expected EBITDA multiple of approximately 5.5x
Corporate pre-tax synergies expected to exceed $20 million annually
Adds 1,844 MW (net interest) of complementary flexible capacity including contracted cogeneration, peaking generation, transmission capacity and development opportunities in hydrogen, which will be needed to support the energy transition and reliability in the Alberta electricity market
Augments and further diversifies TransAlta's portfolio in Alberta's energy-only market
Enhances TransAlta's competitive positioning in the highly dynamic and shifting electricity landscape in Alberta

TransAlta Corporation (TSX: TA) (NYSE: TAC) ("TransAlta" or "the Company") announced that it has entered into a definitive share purchase agreement (the "Agreement") with an affiliate of Energy Capital Partners ("ECP"), the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, "Heartland"), pursuant to which TransAlta will acquire Heartland and its entire business operations in Alberta and British Columbia. Heartland owns and operates generation assets consisting of 507 megawatts (MW) of cogeneration, 387 MW of contracted and merchant peaking generation, 950 MW of gas-fired thermal generation, transmission capacity and a development pipeline that includes the 400 MW Battle River Carbon Hub. The purchase price for the acquisition is $390 million, subject to working capital and other adjustments, as well as the assumption of $268 million of low-cost debt. The Company will finance the transaction using cash on hand and draws on its credit facilities. The Agreement provides that economic benefits arising after October 31, 2023 will be to the account of TransAlta.

TransAlta to Acquire Heartland Generation from Energy Capital Partners for $658 million - Expands Capabilities to Meet Demands of Energy Transition (newswire.ca)

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