Birch Hill to acquire AltaGas’ selected Canadian non-core midstream assets for $165M

CPE Media News – pcJournal (9/10/2018) – AltaGas Ltd. (TSX: ALA) has entered into definitive agreements with Birch Hill Equity Partners Management Inc., as general partner of Birch Hill Equity Partners Fund V, for the sale of selected non-core smaller scale gas midstream and power assets in Canada, as well as AltaGas’ commercial and industrial customer portfolio in Canada, for an aggregate purchase price of approximately $165 million.

The transaction is expected to be completed by year-end.

The transaction also includes the 43.7 million shares of Tidewater Midstream and Infrastructure Inc. (TSX: TWM), which AltaGas currently holds. Birch Hill Equity Partners will acquire Tideater shares at $1.45 for $63,370,178 in cash. The purchase and sale of Tidewater shares is expected to close on September 28, 2018 or on such earlier date as may be agreed to between Birch Hill and AltaGas.

Upon closing of the transaction, Birch Hill Equity Partners will become the single largest shareholder with 13% stake in Tidewater.

photo credit: Tidewater

News Release

ALTAGAS ANNOUNCES THE SALE OF NON-CORE MIDSTREAM AND POWER ASSETS

AltaGas continues to execute on its strategy to reshape the company with a focus on Gas and U.S. Utilities opportunities as well as rapidly repay its bridge facility

Calgary, Alberta (September 10, 2018)

AltaGas Ltd. (AltaGas) (TSX: ALA) announced today that it has entered into definitive agreements for the sale of non-core midstream and power assets in Canada and power assets in the United States, for total proceeds of approximately $560 million. The proceeds from the sale of these assets will be used to repay a significant portion of the bridge facility related to the acquisition of WGL Holdings Inc.

With this announcement, AltaGas has announced or completed approximately $1.5 billion in asset sales to date. The funding strategy for the acquisition of WGL Holdings Inc. remains firmly on track to reach the expected total targeted asset sales of at least $2 billion by fourth quarter 2018.

“We expect to have further announcements in the near future on our asset monetizations, which will continue to reshape AltaGas to focus on Gas and U.S. Utilities, while keeping a strong footing in the Power market with a focus on capital light, innovative solutions,” stated David Cornhill, Chairman and interim co-Chief Executive Officer of AltaGas. “We remain focused on reshaping AltaGas, directing our capital in high growth areas which will result in strong risk-adjusted returns.”

Asset Sale Details

Non-Core Midstream and Power Assets in Canada

AltaGas has entered into definitive agreements with Birch Hill Equity Partners Management Inc., as general partner of Birch Hill Equity Partners Fund V, for the sale of selected non-core smaller scale gas midstream and power assets in Canada, as well as AltaGas’ commercial and industrial customer portfolio in Canada, for an aggregate purchase price of approximately $165 million. The transaction also includes the 43.7 million shares of Tidewater Midstream and Infrastructure Inc., which AltaGas currently holds.

The sale of the non-core midstream and power assets are subject to customary closing conditions, various National Energy Board approvals, the Competition Act, Canada Transport Act and various other provincial utilities’ commission approvals. The transaction is expected to be completed by year-end.

Non-Core San Joaquin Power Assets in California

AltaGas has entered into an agreement with Middle River Power III, a wholly-owned subsidiary of Avenue Capital, for the sale of gas-fired power assets for a purchase price of approximately USD $300 million (approximately CDN $400 million). These assets comprise the Tracy, Hanford and Henrietta plants totaling 523 MW of capacity.

The sale of the non-core power assets are subject to customary closing conditions, including FERC approval. The transaction has an effective date of September 1, 2018, and is expected to be completed in the fourth quarter of 2018.

Scotiabank acted as sole financial advisor to AltaGas in connection with the San Joaquin transaction.

About AltaGas

AltaGas is an energy infrastructure company with a focus on natural gas, power and regulated utilities. AltaGas creates value by growing and optimizing its energy infrastructure, including a focus on clean energy sources. For more information visit: www.altagas.ca.

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