Boston, December 21, 2010 – Atlantic Power Corp. closed the previously announced acquisition of 100 percent of the membership interests in Cadillac Renewable Energy, a 39.6 MW wood-fired facility located in Cadillac, Michigan.
The purchase price was $77 million, plus customary working capital adjustments, and was funded by $34 million of cash on hand and $43 million of assumed non-recourse, project-level debt.
The assumed non-recourse debt amortizes fully over the term of the power purchase agreement. Operations and maintenance will be managed by Rollcast Energy, Atlantic Power’s majority-owned affiliate.
The company expects to receive distributions from the project in the range of $3.5 million to $4.5 million per year, starting in 2011.
The acquisition brings a number of benefits to Atlantic Power’s shareholders, as it:
* Is immediately accretive to cash flow;
* Has demonstrated an excellent operational record, including an availability factor that has averaged 93 percent since 2006;
* Extends the average contract life of our portfolio due to its long-term power purchase agreement through 2028 with Consumers Energy Co.;
* Has contract capacity payments that comprise about half of the project’s revenue;
* Has developed a broad, reliable network of fuel suppliers, approximately 75 percent of which have provided fuel to the plant since inception; and
* Benefits from a favorable state regulatory climate that provides incentives for biomass projects.