CALGARY, ALBERTA–(Marketwired – Feb. 21, 2017) – Veresen Inc. (“Veresen”) (TSX:VSN) is pleased to announce it has entered into a suite of separate agreements to sell its power generation business for $1.18 billion.
“The sale of our power business is an important milestone in the delivery of our long-term business strategy, and we are very pleased with the outcome,” commented Don Althoff, President and CEO of Veresen. “The $1.4 billion of contracted capital projects in our core natural gas and NGL infrastructure business is now fully funded with no need to access the capital markets, ensuring that top line growth translates into per share metrics. Additionally, the divestiture strengthens our balance sheet, further underpinning our dividend and providing greater flexibility to fund the incremental growth projects we expect to secure over the next 12 to 18 months.”
Veresen has maximized the value of its power business by selling the assets in three separate packages. The following table includes certain key metrics and aggregate implied transaction multiples for Veresen’s power generation business:
|Transaction Value||$1.18 billion|
|Estimated Project Level Financing (December 31, 2016)||$402 million|
|Estimated Full Year 2016 EBITDA||$92 million|
|Implied EBITDA Multiple||12.8 x|
Each of the agreements is subject to closing adjustments and conditions customary in transactions of this nature. Closing is expected to occur during the second quarter of 2017 subject to the receipt of all necessary approvals. Veresen anticipates the minimal amount of cash taxes arising from the sale of the power business will be recovered in the following year. The company expects to update its 2017 guidance for the divestiture of the power business upon the closing of the sale process. TD Securities Inc. acted as the company’s sole financial advisor on this divestiture.
About Veresen Inc.
Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in the Alliance Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System; a midstream business which includes a partnership interest in Veresen Midstream Limited Partnership, which owns assets in western Canada, and an ownership interest in Aux Sable, which owns a world-class natural gas liquids (NGL) extraction facility near Chicago, and other natural gas and NGL processing energy infrastructure; and a power business comprised of a portfolio of assets in Canada. Veresen is also developing Jordan Cove LNG, a six million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated Pacific Connector Gas Pipeline. In the normal course of business, Veresen regularly evaluates and pursues acquisition and development opportunities.
Veresen’s Common Shares, Cumulative Redeemable Preferred Shares, Series A, Cumulative Redeemable Preferred Shares, Series C, and Cumulative Redeemable Preferred Shares, Series E trade on the Toronto Stock Exchange under the symbols “VSN”, “VSN.PR.A”, “VSN.PR.C” and “VSN.PR.E”, respectively. For further information, please visit www.vereseninc.com.