Ontario Power Generation (OPG) has entered into an agreement to acquire Cube Hydro, an operator of small and medium-sized hydropower facilities in the northeast and southeast U.S.
OPG says the acquisition provides additional scale to its existing U.S. hydro platform and should generate meaningful operational synergies between the two platforms, including enhanced opportunities for further capital deployment.
“OPG has significant hydroelectric expertise in Ontario and in the U.S., so acquiring this portfolio of diversified, high-quality, long-life assets represents a natural fit for us,” said OPG’s Ken Hartwick, president and chief executive officer. “This is also an opportunity to grow our revenue base over the long term and provide increased returns to our Shareholder, the Province of Ontario.”
This investment will be financed primarily through OPG’s corporate public debt program or other available credit facilities. Goldman Sachs & Co. LLC acted as a financial advisor to OPG on the acquisition. The transaction is subject to standard regulatory approvals. Once the acquisition is finalized, Cube Hydro will operate as part of OPG’s U.S. hydroelectric platform. OPG expanded to the U.S. through its acquisition of Eagle Creek Renewable Energy in November 2018.
Cube Hydro was established in 2014 and operates 19 hydropower facilities, providing 385 MW of in-service capacity at facilities in New York, Pennsylvania, Virginia, West Virginia and North Carolina. Its enterprise value is US$1,123 million, subject to customary working capital and other adjustments on closing.
OPG produces about half of the electricity Ontarians rely on every day, and its clean, safe power costs an average of 40% less than other generators in the province, according to a press release.