OPG to acquire I Squared Capital’s Cube Hydro for US $1.12B

Ontario Power Generation (OPG) has entered into an agreement to acquire Cube Hydro Partners LLC and its affiliate Helix Partners from I Squared Capital for an enterprise value of US $1,123 million.

Cube Hydro and its affiliates own and operate 19 hydropower plants on ten rivers in five states with a combined capacity of 385 megawatts, generating 1.5 million megawatt-hours annually, or enough electricity to power approximately 147,000 homes with renewable energy.

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

Goldman Sachs & Co. LLC acted as a financial advisor to OPG on the acquisition.

Bethesda, Maryland based Cube Hydro was formed in 2014 when Enduring Hydro entered into a partnership with I Squared Capital infrastructure fund, ISQ Global Infrastructure Fund I, to develop, acquire and operate a platform of small to mid-sized hydropower plants located in North America, primarily in the United States.

photo credit: Cube Hydro

News Release

OPG TO ACQUIRE CUBE HYDRO – U.S. BASED HYDROPOWER COMPANY

Continues strategic growth with greater financial return for Ontarians

TORONTO – 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.

-30 –
For further information, please contact:
Ontario Power Generation
416-592-4008 or 1-877-592-4008
Follow us @opg

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.