The move positions Capital Power among the top five North American pPower producers.
This acquisition enhances Capital Power’s standing as one of the top five independent power producers in North America, boosting its natural gas capacity to over 10GW. It aligns with the company’s strategy to expand in the PJM market, serving Pennsylvania, New Jersey, and Maryland. The facilities are projected to generate an average annual adjusted EBITDA of approximately $443 million from 2026 to 2030.
To finance the acquisition, Capital Power initiated a $500 million common share offering, fully meeting the equity funding requirements. Additional funding will be sourced from cash reserves, debt financing, and credit facilities. A commitment letter from a Canadian chartered bank affiliate of TD Securities secures $2 billion in senior unsecured term loans. The company also has access to $1 billion through its existing revolving credit facilities, ensuring financial flexibility and maintaining its investment-grade credit rating.
Capital Power’s president and CEO, Avik Dey, stated: “Capital Power’s acquisition of Hummel and Rolling Hills expands our US generation fleet and advances our position as a leading North American power producer. With our expansion into the largest and most liquid power market in North America, we continue to deliver on our strategy. These plants will bolster our flexible generation portfolio and align with our commitment to provide reliable, affordable power solutions that support a balanced approach to energy expansion.”
In collaboration with TD Securities and CIBC Capital Markets, Capital Power issued 8,060,000 common shares at $43.45 each, raising $350 million. An over-allotment option could increase proceeds to $403 million, and a private placement with the Alberta Investment Management Corporation will contribute $150 million. The public offering and private placement are expected to close around April 22, 2025.
The proceeds will primarily fund the acquisition, with plans for alternative growth opportunities if the transaction does not proceed. This funding approach supports Capital Power’s financial stability and its strategic expansion in the North American energy market.
