Alterra Power to be Acquired by Innergex, Share Price Soars

Canadian cleantech giant Innergex Renewable Energy (TSX:INE) just expanded its portfolio in a big, big way.
On Monday (October 30), the energy company announced in a joint press release that Innergex it will be acquiring Vancouver-based Alterra Power (TSX:AXY) in a whopping CAD$1.1 billion deal, which includes the balance of Alterra’s debt.
According to the release, shareholders of Alterra will receive $8.25 per share, payable in $2.06 cash and in 0.4172 common shares of Innergex. According to the release, the deal represents a premium of 58 percent to Alterra’s 20-day weighted average price of $5.21 on the TSX as of market close on October 27, 2017.

Before the deal becomes official, however, 66 percent of Alterra’s shareholders must approve the transaction at a special shareholders meeting, which will be held sometime next month.
“This transaction is highly strategic and accretive for Innergex as we believe it significantly accelerates Innergex’s growth profile with a path to reach a net installed capacity of over 2,000 MW by 2020,” Michael Letellier, president and CEO of Innergex said in the joint release.
Once shareholders approve the transaction, the deal will be subject to court and a number of regulatory approvals in Canada and the US, key third party consents and other closing conditions. Subject to those conditions, the transaction is likely to occur in the first quarter of 2018, the release states.
Formed in 2011, Alterra Power develops and owns a number of renewable energy projects in Iceland, run-of-river projects in BC, and wind and solar plants in the US and in BC. With Innergex already being Canada’s largest renewable energy company in terms of market cap, the acquisition will add eight additional renewable energy plants to its portfolio, Business Vancouver states.
Since Monday’s announcement, shares of Alterra have soared 55.62 percent to close at $7.89 on Thursday (November 2), while shares of Innergex have dropped 4.14 percent to $14.12.
As a result, analysts at Canaccord Genuity have change upgraded Alterra’s stock from a “speculative buy” to a “buy rating, while the Royal Bank of Canada has lifted its target price from $6.00 to $8.25. Similarly for Innergex, investment analysts at TD Security have bumped the stock from $15 to $15.50, but currently have a “hold” rating on Innergex.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.