AltaGas Ltd said its unit has agreed to buy a portfolio of three natural gas-fired electricity generation plants in northern California for US$642 million.
The three plants produce 523 megawatt, AltaGas said on Monday.
AltaGas Power Holdings is buying GWF Energy Holdings LLC, the owner of the plants, from Highstar Capital IV LP.
The deal is consistent with AltaGas’ strategy of increasing its clean energy portfolio by adding gas-fired electrical generation and expanding its power market business.
The Calgary-based power company also raised its monthly dividend to 16.5 cents from 16 cents.
AltaGas, whose power generation infrastructure in California is mostly in the south, plans to expand in northern California with this deal.
AltaGas expects to fund the acquisition, expected to close in the fourth quarter, with a combination of equity and debt.
The company said it will issue 8.8 million common shares at $34.25 each in a bought deal led by Toronto-Dominion Bank and Bank of Montreal.
AltaGas’ shares closed at $35.52 on the Toronto Stock Exchange. Up to Monday’s close, the stock had declined about 18 percent this year.
(Reporting by Sneha Banerjee in Bengaluru; Editing by Sriraj Kalluvila)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Highstar Capital