Sprott Power to acquire Shear Wind in USD-33m cash deal

Aug 9, 2012 - Canadian renewable energy company Sprott Power Corp (TSE:SPZ) has agreed to take over wind farm developer Shear Wind Inc (CVE:SWX) for some CAD 33 million (USD 33.2m/EUR 26.9m) in cash, Sprott said today.

Sprott Power will buy Shear Wind's shares at a price of CAD 0.2213 apiece, representing a 20% premium to the 20-day volume-weighted trading price.

Apart from the cash payment of CAD 33 million, Sprott will also assume CAD 51 million of Shear Wind's debt, which will be offset by CAD 5 million in cash on hand after adjustments. This puts the total value of the Shear Wind enterprise at CAD 79 million.

The board of directors of Shear Wind has approved the deal and advised shareholders to vote in favour of the acquisition, Sprott Power said. The closing of the transaction is expected in the middle of October.

The acquisition will boost Sprott Power's asset portfolio capacity to 144 MW from 80 MW, its president and CEO Jeff Jenner said.

Shear Wind has a 51% stake in the 62.1-MW Glen Dhu wind farm and fully owns the 1.6-MW Fitzpatrick wind farm, both operating in the province of Nova Scotia. The company also has some 860 MW of wind projects under development in Canada.

After the takeover, Wind Canada Investments and Genera Avante Holdings Canada Inc (GAHC), a unit of Spanish utility Inveravante Inversiones Universales SL, will pay CAD 1.8 million to Sprott to boost GAHC's stake in the Glen Dhu wind farm from 49% to 51% and to buy 50% stake in the Fitzpatrick wind farm.

Sprott Power also said it had agreed to sell CAD 30 million of 6.75% convertible unsecured subordinated debentures to underwriters led by Canaccord Genuity Corp to partly finance the takeover. The offering, expected to complete on August 28, depends on various conditions, including bourse approval.

(CAD 1 = USD 1.007/EUR 0.816)

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