International Power to acquire US assets
International Power has agreed to acquire a 1,857 MW portfolio of peaking generation facilities, located in the Pennsylvania, New Jersey and Maryland for $856.4m.
The acquisition, from a subsidiary of Tenaska Power Fund and an affiliate of Warburg Pincus LLC, will be funded by non recourse project debt of $434m and $461m of equity.
It will be immediately free cash flow enhancing and is expected to be earnings neutral in the first few years, with strong earnings growth in future years.
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'This acquisition of modern peaking plants in attractive power markets complements our existing portfolio of power stations in North America and improves further our ability to benefit from tightening reserve margins in the region. The acquisition is at a material discount to new build costs and is expected to deliver a strong return on investment," said CEO Philip Cox
Completion of the acquisition is expected to occur by the end of the third quarter.
