CALGARY, Alberta, Nov. 14, 2024 (GLOBE NEWSWIRE) — TransAlta and ECP Reach Agreement

Transaction Details

TransAlta Corporation and Energy Capital Partners (ECP) have agreed to an $80 million purchase price reduction to account for the divestiture of two assets totaling 97 MW. The revalued transaction is approximately $542 million, inclusive of $232 million in low-cost debt assumption. Additionally, there will be a further economic adjustment of around $80 million reflecting the economic benefits of the Heartland business since the transaction’s effective date of October 31, 2023, before working capital adjustments.

The Heartland portfolio is valued at a net price of approximately $270 per kilowatt, with an expected EBITDA multiple of about 5.4 times. The deal is expected to be highly accretive to free cash flow, offering an attractive cash yield upon closing supported by 60% of revenues under contract with a weighted-average remaining life of 15 years.

The transaction will also bring corporate pre-tax synergies of approximately $20 million per annum to TransAlta. It will add 1,747 MW of capacity, including cogeneration, peaking generation, gas-fired thermal generation, transmission capacity, and potential hydrogen development opportunities, all essential for reliability in the Alberta electricity market. This will enhance and diversify TransAlta’s competitive portfolio in the dynamic Alberta energy landscape.

Impact Analysis

Effect on Me:

As a consumer of electricity in Alberta, this acquisition could potentially lead to more reliable and diversified energy sources, potentially resulting in more stable prices and improved service quality. The addition of new generation capacity and technologies could also pave the way for cleaner energy solutions in the future.

Effect on the World:

This transaction showcases the ongoing shift towards cleaner energy alternatives in the global electricity market. By incorporating potential hydrogen development opportunities and enhancing reliability in the Alberta electricity market, TransAlta’s acquisition could serve as a model for sustainable energy practices worldwide, influencing other energy companies to follow suit.

Conclusion

In conclusion, the agreement between TransAlta and ECP represents a significant step towards a more sustainable and diversified energy future. The transaction not only benefits the Alberta electricity market but also sets an example for the rest of the world to follow in embracing cleaner and more reliable energy solutions.