Nevada-based geothermal developer Ormat Technologies Inc. today said it will buy U.S. Geothermal Inc. for about $110 million.
According to Ormat, U.S. Geothermal is currently operating geothermal power projects at Neal Hot Springs, Ore.; San Emidio, Nev.; and Raft River, Idaho, for a total designed net output of 45 MW that currently generate approximately 38 MW net. In addition, U.S. Geothermal is developing projects at the Geysers, Calif.; a second phase project at San Emidio, Nev.; at Crescent Valley, Nev.; and the El Ceibillo project located near Guatemala City, Guatemala.
Ormat said that the operating assets are selling power under existing power purchase agreements, with an aggregated contract capacity of 55 MW. Based on plans to improve the acquired portfolio and implementation of synergies and cost reductions, Ormat expects to improve profitability of the operating projects by approximately 50 percent during 2019.
“This acquisition significantly broadens and diversifies our operations in the United States, expanding our presence into Idaho and Oregon and giving us additional opportunities as we evaluate U.S. Geothermal’s development pipeline,” Isaac Angel, CEO of Ormat, said in a statement. “With this transaction, we demonstrate again the implementation of our business strategy to grow our business with accretive M&A transactions and organic growth, underscoring our commitment to creating sustainable value for our shareholders.”
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