IRVING, Texas, Feb. 7, 2019 /PRNewswire/ -- Today, Vistra
Energy (NYSE: VST) and Crius Energy Trust (TSX: KWH.UN) announced they have entered into a definitive agreement pursuant to which
Vistra will acquire Crius Energy for cash consideration of C$7.57 per trust unit. Following
the closing of the transaction, Vistra will be the leading residential electricity provider in the nation with operations in 19
states and the District of Columbia.
"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," said Curt Morgan, Vistra's President and Chief Executive Officer. "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."
Morgan added, "This transaction is consistent with Vistra's stated strategy to grow our retail business at attractive
multiples while remaining committed to our capital allocation and deleveraging plans."
The announcement of this transaction follows a competitive strategic review process led and unanimously recommended by the
Independent Directors of Crius Energy, and unanimously approved by Crius Energy's Board of Directors.
"We are pleased to announce this transaction and are confident that it is in the best interests of our unitholders and other
stakeholders," said Brian Burden, Chairman of Crius Energy's Board of Directors. "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."
The purchase price of C$7.57 per unit represents an approximately 38 percent premium to Crius
Energy's unit price of C$5.48 as of market close on Feb. 6,
2019. In addition to the purchase price, Crius Energy unitholders will receive Crius Energy's previously-declared
distribution for the first quarter of 2019 in the amount of C$0.209 per unit for total
consideration in the amount of C$7.779 per unit. Under the definitive agreement, Crius Energy
has agreed not to declare any further distributions prior to the closing.
"We are excited to have reached an agreement with Vistra, a leading integrated power company serving approximately 2.9 million
customers with more than 40 GW of generation," said Michael Fallquist, Chief Executive Officer of
Crius Energy. "Partnered with Vistra, Crius Energy will be well-positioned to continue providing our customers and
strategic partners with differentiated products and services."
Transaction Highlights
- Strategic acquisition accelerating Vistra's Midwest and Northeast growth strategy via Crius Energy's presence in 19 states
and the District of Columbia, selling both electricity and natural gas products primarily to
high value residential and small business customers
- High degree of overlap with Vistra's generation fleet; approximately 11.6 TWhs of load acquired, improving Vistra's match
of its generation to load profile to approximately 45 percent
- Establishes a platform for future growth, leveraging Vistra's existing retail marketing capabilities and Crius Energy's
experienced team
- Enhances integrated value proposition through collateral and transaction efficiencies, particularly via Crius Energy's
largely residential portfolio
- Complements Vistra's municipal aggregation and large commercial and industrial portfolio acquired from Dynegy in
April 2018 and part of a broader organic expansion effort
- Approximately US$328 million purchase price (assuming an exchange rate of US$0.76 for each C$1), which Vistra intends to fund with cash on hand, plus
assumption of Crius Energy net debt of approximately US$108 million
- Attractive premium of 38 percent above Crius Energy's Feb. 6, 2019 closing price paid to
Crius Energy unitholders
- Acquisition economics exceed Vistra's investment threshold of mid-to-high teens unlevered returns; achieved only through
the expertise and scale of the Vistra retail business
- Tuck-in acquisition with no anticipated changes to Vistra's capital allocation or deleveraging plans
- Continued "focus on the customer" approach
- Unanimous recommendation of Crius Energy's Independent Directors in favor of the transaction, with voting and support
agreements representing approximately 17 percent of Crius Energy's units executed in support of the transaction
Transaction and Approvals
The proposed transaction has been structured as a sale of two wholly owned subsidiaries of Crius Energy that indirectly own
the Crius Energy business. The definitive agreement includes customary deal protections, including non-solicitation
covenants, the right of Vistra to match any competing proposals, and the payment of a termination fee to Vistra under certain
circumstances.
The proposed transaction is subject to the approval of at least two-thirds of Crius Energy's unitholders. Unitholders of
Crius Energy representing approximately 17 percent of the units, including all of the directors and senior officers of Crius
Energy, have entered into voting and support agreements with Vistra in support of the transaction.
In addition to satisfying the closing conditions and consents customary for a transaction of this nature, the transaction is
also subject to applicable regulatory approvals, including the expiration or termination of any applicable waiting period under
the United States Hart-Scott-Rodino Antitrust Improvements Act, and approval by the Federal Energy Regulatory Commission
(FERC).
Pending the receipt of all necessary approvals and the fulfillment of all other customary closing conditions, the parties
expect the transaction to close in the second quarter of 2019.
Additional Information
Vistra has posted a presentation with additional details of the transaction on the investor relations section of its website
at www.vistraenergy.com.
Crius Energy will include the full details of the transaction in a management information circular describing the matters that
will be considered at the special meeting of Crius Energy's unitholders, which is expected to be mailed in early March 2019. A copy of the definitive agreement will also be made available on SEDAR under Crius Energy's
issuer profile at www.sedar.com.
Crius Energy Board Recommendation
Crius Energy's Board of Directors, on the unanimous recommendation of its Independent Directors, approved the transaction and
will recommend that Crius Energy's unitholders vote in favor of the transaction. The Board received a fairness opinion from
Guggenheim Securities LLC determining that, based upon and subject to the assumptions, limitations, and qualifications stated in
the opinion, the per unit consideration to be received by Crius Energy's unitholders under the transaction is fair, from a
financial point of view, to the unitholders.
A copy of the fairness opinion, which should be read carefully and in its entirety, and other relevant background information,
will be included in the management information circular that will be mailed to Crius Energy's unitholders in connection with the
special meeting.
Advisors
Guggenheim Securities LLC is serving as financial advisor to Crius Energy and Bennett Jones LLP and Baker Botts LLP are
serving as legal advisors to Crius Energy.
RBC Capital Markets is serving as financial advisor to Vistra and Latham & Watkins, LLP is serving as legal advisor to
Vistra.
Company Contacts:
Allan Koenig
Vistra Media
214-875-8004
Media.Relations@vistraenergy.com
Molly Sorg
Vistra Investor Relations
214-812-0046
Investor@vistraenergy.com
Michael Fallquist
Crius Energy Chief Executive Officer
mfallquist@criusenergy.com
(203) 663-7545
Roop Bhullar
Crius Energy Chief Financial Officer
rbhullar@criusenergy.com
(203) 883-9900
Kelly Castledine
Crius Energy Investor Relations
kcastledine@criusenergy.com
(416) 644-1753
About Vistra Energy
Vistra Energy (NYSE: VST) is a premier, integrated power company based in Irving,
Texas, combining an innovative, customer-centric approach to retail with a focus on safe, reliable, and efficient power
generation. Through its retail and generation businesses which include TXU Energy, Homefield Energy, Dynegy, and Luminant, Vistra
operates in 12 states and six of the seven competitive markets in the U.S., with about 5,400 employees. Vistra's retail brands
serve approximately 2.9 million residential, commercial, and industrial customers across five top retail states, and its
generation fleet totals approximately 41,000 megawatts of highly efficient generation capacity, with a diverse portfolio of
natural gas, nuclear, coal, solar and battery storage facilities. The company is currently developing the largest battery
energy storage system of its kind in the world – a 300-MW/1,200-MWh system in Moss Landing,
California.
About Crius Energy Trust
With approximately 1 million residential customer equivalents, Crius Energy provides competitive electricity and
natural gas products to residential and commercial customers in 19 states and the District of
Columbia in the United States. The Company sells energy products through a family of
brands strategy utilizing a multi-channel sales approach including exclusive partnerships, direct-to-consumer channels, and
broker marketing channels. Crius Energy offers consumers a broad suite of energy products and services including fixed and
variable contracts, renewable energy, and bundled products to support their energy needs beyond what is offered by their local
utility.
Cautionary Note Regarding Forward-Looking Statements
Material information pertaining to Crius Energy may be found on SEDAR under the Trust's issuer profile at www.sedar.com or on the Trust's website at www.criusenergytrust.ca.
The information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about
the industry and markets in which Vistra Energy Corp. ("Vistra Energy") and Crius Energy Trust ("Crius Energy") operate and
beliefs of and assumptions made by Vistra Energy's and Crius Energy's management, involve risks and uncertainties, which are
difficult to predict and are not guarantees of future performance, that could significantly affect the financial results of
Vistra Energy or Crius Energy. The definitive agreement contains conditions to closing and there is no assurance that these
conditions will be fulfilled prior to the outside date provided therein. All statements, other than statements of
historical facts, that are presented herein, or in response to questions or otherwise, that address activities, events or
developments that may occur in the future, including such matters as activities related to our financial or operational
projections, projected synergy, value lever and net debt targets, capital allocation, capital expenditures, liquidity, projected
Adjusted EBITDA to free cash flow conversion rate, dividend policy, business strategy, competitive strengths, goals, future
acquisitions or dispositions, development or operation of power generation assets, market and industry developments and the
growth of our businesses and operations (often, but not always, through the use of words or phrases, or the negative variations
of those words or other comparable words of a future or forward-looking nature, including, but not limited to, "intends,"
"plans," "will likely," "unlikely," "believe," "expect," "seek," "anticipate," "estimate," "continue," "will," "shall," "should,"
"could," "may," "might," "predict," "project," "forecast," "target," "potential," "forecast," "goal," "objective," "guidance" and
"outlook"), are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements.
Although Vistra Energy and Crius Energy believe that in making any such forward-looking statement, Vistra Energy's and Crius
Energy's expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and risks
that could cause results to differ materially from those projected in or implied by any such forward-looking statement, including
but not limited to adverse changes in general economic or market conditions (including changes in interest rates) or changes in
political conditions or federal or state laws and regulations and the ability of the parties to achieve all of the conditions to
the closing in order to consummate the transaction (including obtaining any necessary regulatory approvals and Crius Energy
unitholder approval for the transaction).
Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law, neither
Vistra Energy nor Crius Energy will undertake any obligation to update any forward-looking statement to reflect events or
circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from
time to time, and it is not possible to predict all of them; nor can Vistra Energy or Crius Energy assess the impact of each such
factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained
in any forward-looking statement.
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SOURCE Vistra Energy