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Northland Power to acquire majority of EBSA in Colombia
Posted on Tuesday, 10 September 2019 09:49
Canada’s Northland Power has set the terms of an agreement to pick up a 99.2 per cent interest in Colombian utility Empresa de Energía de Boyacá (EBSA) for COP 2,665 billion (USD 784.92 million).
The Toronto-based business is buying the target from Fondo de Capital Privado de Infraestructura Brookfield Colombia and BCIF Holdings Colombia with the price subject to certain purchase price adjustments following the receipt of final approval by the country’s energy and utility regulator.
Northland Power is looking to further diversify its portfolio by adding infrastructure in Latin America to its existing presence in North America and Europe.
EBSA is expected to contribute COP 255.00 billion to the acquiror’s adjusted earnings before interest, taxes, depreciation and amortisation in 2020, with the deal likely to generate mid-single digit accretion to free cash flow per share during the regulatory period ending 2023.
The transaction will be funded initially with a fully-committed 12-month CAD 1.10 billion (USD 835.63 million) bridge facility, as well as CAD 315.00 million of gross proceeds in common equity via a concurrent bought deal public offering of subscription receipts.
In addition, a further CAD 450.00 million to CAD 500.00 million of non-recourse debt financing supported by the EBSA business is also part of the consideration, with the balance financed from cash on hand and borrowings under Northland Power’s corporate credit facility.
The acquisition is expected to complete in the fourth quarter of 2019.
EBSA is the sole electricity distribution company for the department of Boyacá, which is located close to the Bogota capital.
It serves 1.30 million residents across 123 municipalities and is billed as one of the ten largest power groups in Colombia.
This deal represents Northland Power’s second investment in Latin America this year after starting construction of its 130.00 mw La Luncha solar project in the State of Durango in Mexico in May 2019.
Colombia is the third-largest population centre in region with nearly 50.00 million residents and a growing middle class.
EBSA has over CAD 2.00 billion of transmission projects expected to be tendered in the next 18 months.
Northland Power owns over CAD 10.00 billion of energy infrastructure and power assets globally and generated adjusted EBITDA of CAD 487.71 million on sales of CAD 842.36 million in the six months to 30th June 2019.
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