November 26 (Renewables Now) - SIMEC Atlantis Energy Ltd (LON:SAE) has agreed to buy UK mini-hydro developer and operator SIMEC Green Highland Renewables (SIMEC GHR) for an enterprise value of GBP 124.7 million (USD 160m/EUR 141m).
The company said on Friday that it has entered into a conditional deal to buy another company from its largest shareholder -- the SIMEC Group -- after acquiring SIMEC Uskmouth Power Limited earlier this year.
The new acquisition target has a portfolio of mini hydropower plants (HPPs) with a combined capacity of around 20 MW, attributable to both SIMEC GHR and third party interests. Each facility benefits from 20-year fixed price feed-in-tariff (FiT) payments. Furthermore, SIMEC GHR has one project under construction and one project in development, together representing 8 MW of additional capacity.
Tim Cornelius, CEO of SIMEC Atlantis Energy, commented that SIMEC GHR’s operating assets “cannot be replicated due to recent changes in legislation”. He added that the purchase will have a positive cash flow positive impact on the group in the first year and also diversify its generation. The transaction is expected to result in strong revenue growth between 2019 and 2021.
Under the terms of the deal, the tidal power major will pay GBP 29.7 million, comprising a cash payment of GBP 14.85 million and partial debt repayment. The remaining portion of the agreed enterprise value represents long-term project financing that has already been secured by the business being acquired.
Completion of the transaction is subject to concluding a due diligence on the target and is seen to take place in the first quarter of 2019.
(GBP 1.0 = USD 1.283/EUR 1.129)