Calgary: Veresen Inc. announced February 21 that it has entered into a suite of separate agreements to sell its power generation business for $1.18 billion. Veresen's power business consists of approximately 625 MW of primarily renewable and gas-fired generation facilities.
"The sale of our power business is an important milestone in the delivery of our long-term business strategy, and we are very pleased with the outcome," commented Don Althoff, President and CEO of Veresen. "The $1.4 billion of contracted capital projects in our core natural gas and NGL infrastructure business is now fully funded with no need to access the capital markets, ensuring that top line growth translates into per share metrics. Additionally, the divestiture strengthens our balance sheet, further underpinning our dividend and providing greater flexibility to fund the incremental growth projects we expect to secure over the next 12 to 18 months."
Veresen says that it has maximized the value of its power business by selling the assets in three separate packages. The following table includes certain key metrics and aggregate implied transaction multiples for Veresen's power generation business:
• Transaction Value: $1.18 billion
• Estimated Project Level Financing (December 31, 2016): $402 million
• Estimated Full Year 2016 EBITDA: $92 million
• Implied EBITDA Multiple: 12.8 x
Each of the agreements is subject to closing adjustments and conditions customary in transactions of this nature. Closing is expected to occur during the second quarter of 2017 subject to the receipt of all necessary approvals.