OPG to buy I Squared Capital’s Cube Hydro in $1.12 bln deal


Photo courtesy of Ontario Power Generation Inc

Ontario Power Generation (OPG) has agreed to acquire Cube Hydro Partners, a Bethesda, Maryland-based operator of small and medium-sized hydropower facilities in the northeast and southeast United States.

The deal values Cube Hydro at US$1.12 billion ($1.48 billion). It is expected to close in the months ahead.

The seller is I Squared Capital, a U.S. infrastructure investment firm. Cube Hydro was formed in 2014 when Enduring Hydro partnered with I Squared to develop and acquire hydropower plants.

OPG, an Ontario government-owned electricity generator, said the acquisition will add scale to its U.S. hydro platform, create synergies, and expand opportunities for capital deployment.

PRESS RELEASE

OPG to Acquire Cube Hydro – U.S. Based Hydropower Company

Continues strategic growth with greater financial return for Ontarians

TORONTO, June 25, 2019 /CNW/ – Today, Ontario Power Generation (OPG) announced it has entered into an agreement to acquire Cube Hydro through its U.S. hydroelectric platform. Cube Hydro is an operator of small and medium-sized hydropower facilities based in the northeast and southeast United States.

“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 & CEO. “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.”

The acquisition provides additional scale to OPG’s existing U.S. hydro platform and is expected to generate meaningful operational synergies between the two platforms, including enhanced opportunities for further capital deployment.

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 the OPG’s U.S. hydroelectric platform.

Key Facts on OPG’s acquisition of Cube Hydro:

Established in 2014, Cube Hydro operates 19 hydropower facilities, providing 385 MW of in-service capacity.
Facilities are located in New York, Pennsylvania, Virginia, West Virginia and North Carolina.
Environmental profile well-positioned for continued de-carbonization of the electricity industry
Enterprise value is $1,123 million USD, subject to customary working capital and other adjustments on closing.
Enhanced returns for Ontarians, providing stable cash flows for generations to come with no impact on electricity bills.

OPG is one of the most diverse electricity generators in North America. It 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 Ontario.

For further information: Ontario Power Generation, 416-592-4008 or 1-877-592-4008, Follow us @opg