Independent power generation company International Power Plc (IPR, IPR.L) Wednesday said it has signed a deal to acquire privately-held Canadian wind farm developer AIM PowerGen Corporation for an enterprise value of C$189 million, or GBP 109 million, from Guildford, Surrey-based Renewable Energy Generation Limited. The purchase is anticipated to be completed by the end of the year and is subject to the approval of Renewable Energy shareholders.
The deal calls for a net cash consideration of C$119 million, or GBP 69 million, which is to be funded from International Power's existing cash resources.
London-based Independent Power said that the acquisition is estimated to be immediately free cash flow positive, and accretive to earnings with the completion of 40 megawatt Harrow project construction program in 2010.
The AIM PowerGen portfolio is concentrated in Ontario, Canada, with 40MW of wind farms in operation and 40MW Harrow project construction program, expected to be completed in the first half of 2010. The construction cost of 40MW is estimated to be an additional C$52 million, or GBP 30 million, which is to be funded from a credit approved project finance facility.
Additionally, AIM PowerGen has an advanced development pipeline of 1,200MW in Ontario and across Canada.
Commenting on the acquisition, International Power's chief executive officer Philip Cox said, "It represents an excellent opportunity for International Power to establish a platform for future growth in the attractive Canadian renewables sector."
IPR last traded on July 27 at $85.19 per share on the New York Stock Exchange.
IPR is currently trading at 293.20 pence per share, down 1%, on the London Stock Exchange.
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