Boralex buys wind park interest, raises EBITDA and capacity targets

Wind farm in Ontario. Author: John Vetterli. License: Creative Commons, Attribution-ShareAlike 2.0 Generic

December 12 (SeeNews) - Canadian renewables developer Boralex Inc (TSE:BLX) said on Thursday it has signed a binding deal to buy Enercon Canada’s entire economic interest in the 230-MW Niagara Region wind farm in Ontario.

The fresh agreement supersedes Boralex’s announcement from early last month of its intention to acquire a 25% economic interest in the asset. The company will pay CAD 238.5 million (USD 182m/EUR 171m) in cash for the shareholding.

The particular wind park, located across the regional municipality of Niagara, was commissioned on October 30, 2016. It comprises 77 of Enercon’s E-101 turbines. The wind farm has a 20-year feed-in tariff (FiT) contract with the province-owned IESO. Boralex pointed out that the interest it acquires will give it rights to substantially all of the expected net cash flows from the asset over the term of the FiT contract.

The stake buy is expected to close next month.

Commenting on the news, Boralex’s president and CEO, Patrick Lemaire, said that this transaction will result in double-digit accretion to the company’s 2017 discretionary cash flow per share.

“Today, we remain ideally positioned to keep moving forward with our growth strategy focused on developing and acquiring assets associated with long term power purchase agreements and are pleased to announce the upward revision of our 2020 contracted capacity target from 1,650 to 2,000 MW,” he stated. The current transaction will raise the firm’s net installed capacity by 21% to 1,338 MW.

Boralex also announced that it is revising upward its 2017 target for earnings before interest, tax, depreciation and amortisation (EBITDA) to CAD 375 million from CAD 290 million and its 2017 discretionary cash flow target to CAD 95 million from CAD 75 million.

At the same time, the company will increase its annual dividend by 7.1% to CAD 0.60 a share.

(CAD 1.0 = USD 0.761/EUR 0.719)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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