TransAlta Sees Price Tag Cut for Heartland Generation Acquisition

By Robb M. Stewart

Canadian power company TransAlta is pushing ahead with a deal to buy Heartland Generation and its business operations in Western Canada to expand its generation capacity but has cut the price tag to reflect asset sales ordered by the antitrust regulator.

TransAlta and Energy Capital Partners, the parent of Heartland Generation and Alberta Power, agreed to drop the acquisition price by 80 million Canadian dollars (US$57.1 million) to meet a requirement by the federal Competition Bureau for the deal to be cleared. The price will be lowered by a further C$80 million to reflect the economic benefit of the Heartland business over the last year, since TransAlta unveiled the acquisition.

TransAlta, the owner of a fleet of electrical power-generation assets in Canada, the U.S. and Australia, said it has agreed with the Commissioner of Competition to sell Heartland's Poplar Hill and Rainbow Lake assets after the deal for Heartland closes, which is expected on or before Dec. 4. Energy Capital will be entitled to the proceeds from the sale of the assets.

With the changes, TransAlta said it expects to now pay about C$230 million in cash, before any Heartland debt it will take on.

Heartland owns and operates 507 megawatts of cogeneration assets, 387 MW of contracted and merchant peaking generation, and 950 MW of natural gas-fired thermal generation. It also has a development pipeline that includes the 400 MW Battle River Carbon Hub, a planned hydrogen-fired power generation facility in Alberta.

TransAlta said it expects the acquired assets to add between C$85 million and C$90 million in average annual earnings before interest, taxes, depreciation and amortization.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

November 14, 2024 08:21 ET (13:21 GMT)

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