Innergex Renewable Energy Inc. announced the completion of the acquisition of the Sault Ste. Marie in northwestern Ontario for $50.2 million, as well as the assumption of $169.5 million of existing debt. This acquisition further diversifies Innergex’s portfolio in terms of technology and geography.
High quality assets fully contracted
The portfolio, which includes the Sault Ste. Marie 1, 2 and 3, has a capacity of 60 MW and reached full operation between 2010 and 2011. All three facilities are fully contracted under long-term power purchase agreements with the Independent Electricity System Operator and have an excellent operating history with a five-year weighted availability rate of 98.5%. These contracts have an average remaining term of nearly nine years, providing long-term visibility and stable cash flows. The assets are also consistent with Innergex’s strategy of focusing on high-quality, fully contracted assets.
Stable and attractive cash flows
Over the past four years, cash flow from operating activities in the portfolio has averaged $23.0 million per year, while free cash flow has averaged $7.5 million over the same period. In 2023, the assets are expected to generate annual revenues of approximately $33.1 million, while operating, general and administrative expenses are expected to be approximately $3.1 million. Innergex expects the portfolio to be immediately accretive based on these historical averages.
Michel Letellier, President and Chief Executive Officer of Innergex, said the acquisition of Sault Ste. Marie supports Innergex’s strategy to increase geographic and technological diversification, while benefiting from reliable, high-quality cash flows thanks to its attractive contractual profile. He also added that the company was excited to enter this region of Ontario where heavy industries are looking to decarbonize, which could bring additional opportunities to Innergex in the long term.
