Shareholders okay Capstone’s USD-67m buy of Renewable Energy Developers

Sep 6, 2013 - Capstone Infrastructure Corp (TSE:CSE) and Canada-based Renewable Energy Developers Inc (TSE:RDZ), or RED, have received approval from their shareholder for Capstone’s CAD-70-million (USD 66.6m/EUR 50.8m) acquisition of RED.

The two companies said in a joint statement on Thursday that both Capstone’s and RED’s stakeholders have backed the plan.

Under the terms of the deal, unveiled in July, RED’s stockholders will exchange each share in the firm for 0.26 of a Capstone common share plus CAD 0.001 in cash, for a total value of CAD 1.01 apiece. Once the transaction is closed, the existing stockholders of Capstone will hold an 80% stake in the enlarged entity, while those of RED will own the rest.

The deal is pending regulatory clearance and is subject to third party consents. It is seen be completed within 30 days.

The transaction will form a company with nearly 550 MW of operating and contracted power assets in Canada. The business that will result from the tie-up 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.

RED is former Sprott Power Corp.

(CAD 1.0 = USD 0.952/EUR 0.726)

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