Capital Power Corporation, a power generation company, has agreed to acquire Decatur Power Holdings, LLC, a company which owns Decatur Energy Center situated in Decatur, Alabama, US from LS Power Equity Partners III LP (LS Power), a company engaged in buyout investments in energy and power sector, for a purchase consideration of USD441 million. The total installed capacity of the natural gas-fired combined cycle power generation plant is 795 MW. The transaction will imply a deal value of USD0.55 million per MW.
The acquisition will be financed by the net proceeds raised through the subscription receipt offering and with the balance to be financed through debt utilizing a temporary expansion of its bank facilities followed by permanent financing with an issuance of long-term debt expected later in 2017.
The Decatur Energy sells capacity and energy to a regional entity under a long-term contract. The contract has an original term of 10 years and expires on December 31, 2022.
The acquisition is expected to be closed in June 2017.