Atlantic Power Corp. has entered into an agreement with Veolia Environnement SA to acquire all of the outstanding shares of Ridgeline Energy Holdings Inc., which is currently a wholly owned subsidiary of Eolfi SA, a European renewable energy development company that is majority owned by Veolia.
Under the agreement, Atlantic Power will increase its ownership interest in the 79.2 MW Rockland wind project from 30% to 50% and add a 12.5% interest in Ridgeline's 125 MW Goshen North project. The company will also acquire 100% of Meadow Creek, a 120 MW wind project currently under construction in Idaho that is expected to be complete by the end of the year.
In addition, Atlantic Power will acquire Ridgeline's development pipeline, which includes more than 20 wind and solar projects totaling 1 GW. The company says its planned development expenditures in 2013 are focused on near-term opportunities where power purchase agreements can be obtained quickly.
Wind energy development viability will depend on continued support from renewable portfolio standards in more than 30 states and a possible extension of the production tax credit, Atlantic Power notes.
The total cost of the acquisition will be approximately $88 million, subject to working capital adjustments. The company currently intends to fund the acquisition from the net proceeds of a planned issuance of convertible debt.
The acquisition is subject to approval from the Federal Energy Regulatory Commission and other regulatory agencies. In addition to customary closing conditions, the acquisition closing is subject to Atlantic Power obtaining financing and the Meadow Creek project achieving certain commercial operating milestones. The acquisition is expected to close on or before Dec. 31.