AltaGas Ltd.'s (ALA.TO, ALA_PA.TO) indirect wholly owned unit, AltaGas Power Holdings (U.S.) Inc., has reached a purchase and sale agreement with affiliates of LS Power Equity Advisors, LLC to acquire Blythe Energy, LLC, owning a 507 MW natural gas-fired combined cycle plant, associated major spare parts, and a related 230 kV 67-mile electric transmission line in Southern California, for $515 million.
The acquisition is likely to be accretive to earnings and cash flow per share in 2014, the first full year of ownership, and may add about $50 million in incremental contracted EBITDA per year. The Blythe Energy Center is contracted under a Power Purchase Agreement or "PPA" through to July 2020 with Southern California Edison. Contract provisions match PPA revenues to all major plant costs.
The transaction, which may close in the second quarter of 2013, would be financed consistent with AltaGas' current capital structure. AltaGas would continue to maintain its strong balance sheet and financial discipline and is committed to maintaining its investment grade credit rating.
by RTT Staff Writer
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