New York-based firm buys Boralex facilities in U.S.
By Kathy McCarty
Staff Writer
Boralex Inc. has signed a binding agreement to sell its U.S. wood-residue power stations with a total installed capacity of 186 MW to ReEnergy Holdings LLC for approximately $93 million in U.S. funds (subject to customary working capital closing adjustments), or after-tax proceeds of about $81.
“We have entered into this agreement after considerable reflection by Boralex’s management and Board of Directors about our strategy. We have concluded that, at this stage in our development, this transaction provides Boralex with the best opportunity to pursue its growth objectives in the other areas of the renewable energy market,” said Patrick Lemaire, president and CEO.
Lemaire added that “this transaction is in the best interests of our shareholders, both in terms of creating value and building a foundation for the Corporation’s growth over the next several years.”
“Furthermore, we are pleased that ReEnergy Holdings, a company that is focused on the U.S. biomass renewable energy sector, will be the new owner of our U.S. biomass facilities. Based on their experience in the industry, we are confident that they will continue our tradition of protecting the environment and maintaining positive relationships with our business partners and the communities in which our facilities are located,” said Lemaire.
Boralex plans to invest the proceeds in new renewable energy projects with long-term contracts in Canada and Europe, primarily in the wind, hydroelectric and solar segments. Upon closing of the transaction, 96 percent of the Corporation’s assets, with total installed capacity of more than 500 MW, will have such long-term contracts.
Under the terms of the transaction, Boralex will be entitled to continue to benefit from the sale of renewable energy certificates (RECs) relating to the power stations, receiving a 50 percent share on the amounts received from the sale of RECs for the vintage years 2012-14, which are in excess of a defined threshold price.
Boralex’s legal counsel in this transaction is K&L Gates LLP and its financial advisor is Cormark Securities Inc.
Under the agreement, ReEnergy Holdings LLC, an Albany, N.Y.-based renewable energy company, will acquire a portfolio of five U.S. biomass energy-production facilities in Maine and New York.
The facilities to be acquired include: a 40 MW facility in Ashland, a 36 MW facility in Fort Fairfield, a 40 MW facility in Livermore Falls, a 50 MW facility in Stratton and a 20 MW facility in Chateaugay, N.Y. The facilities rely principally on forest residue to create renewable energy.
With this acquisition, ReEnergy will grow to approximately 260 employees in four states, and its total energy portfolio will expand to 240 MW.
Larry Richardson, CEO, said: “This acquisition is a significant step in our strategy to build an integrated solid fuel renewable energy facilities company in the U.S. We look forward to becoming corporate citizens in four communities in Maine and another community in the North Country of New York, and continuing to provide economic opportunity and clean, reliable, cost-effective renewable energy to those regions.”
Tom Beck, ReEnergy’s chief commercial officer, said: “These facilities will complement our existing portfolio, provide a strong platform for future growth, and help us to forge stronger relationships with the harvesters in our communities who provide fuel for energy.”
The purchase price for the portfolio is approximately $93 million, subject to customary closing adjustments. The transaction is subject to confirmatory due diligence and regulatory approvals. Closing is expected by year-end.
