Capstone Infrastructure wraps up buy of Renewable Energy Developers

Oct 3, 2013 - Capstone Infrastructure Corp (TSE:CSE) said on Tuesday it had completed the CAD-70-million (USD 68m/EUR 50m) acquisition of Canada-based Renewable Energy Developers Inc (TSE:RDZ), or RED.

The transaction formed a company with nearly 550 MW of operating and contracted power assets in Canada. It will have power generation facilities across the country with about 465 MW of installed capacity, including 95 MW of operating wind farms in Nova Scotia and Ontario, plus an additional 79 MW of wind projects under construction, the two firms said previously.

Under the deal, which saw Capstone take possession of all of RED’s issued and outstanding common shares, RED’s stockholders obtained 0.26 of a Capstone common share plus CAD 0.001 in cash, for a total value of CAD 1.01 apiece. All outstanding options to acquire RED shares were exchanged for an option exercisable to buy Capstone shares. The acquired entity’s liabilities connected with its outstanding common share purchase warrants were assumed by Capstone. In addition, RED’s 6.75% convertible unsecured subordinated notes maturing in December 2017 can be converted into Capstone shares and cash but will still be regarded as RED obligations.

The acquisition was unveiled in July and last month was granted approval by both companies’ shareholders. Following its completion, RED’s shares are seen to be delisted from the Toronto Stock Exchange. However, the firm’s outstanding debentures will still trade on the bourse under the symbol “RDZ.DB”. RED is former Sprott Power Corp.

(CAD 1.0 = USD 0.968/EUR 0.712)

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