Altagas announces sale of non-core midstream and power assets

AltaGas Ltd. has announced that it has entered into definitive agreements for the sale of non-core midstream and power assets in Canada and power assets in the United States, for total proceeds of approximately CAD560 million (US$432.37 million). 

AltaGas has entered into definitive agreements with Birch Hill Equity Partners Management Inc., as general partner of Birch Hill Equity Partners Fund V, for the sale of selected non-core smaller scale gas midstream and power assets in Canada, as well as AltaGas' commercial and industrial customer portfolio in Canada, for an aggregate purchase price of approximately CAD165 million (US$127.39 million). The transaction also includes the 43.7 million shares of Tidewater Midstream and Infrastructure Inc., which AltaGas currently holds.

The sale is subject to customary closing conditions, various National Energy Board approvals, the Competition Act, Canada Transport Act and various other provincial utilities' commission approvals.  The transaction is expected to be completed by year-end.

Additionally, the company entered into an agreement with Middle River Power III, a wholly-owned subsidiary of Avenue Capital, for the sale of gas-fired power assets for a purchase price of approximately US$300 million. These assets comprise the Tracy, Hanford and Henrietta plants totaling 523 MW of capacity.

The sale is subject to customary closing conditions, including FERC approval.  The transaction has an effective date of 1 September 2018, and is expected to be completed in the fourth quarter of 2018.   

The proceeds from both sales will be used to repay a significant portion of the bridge facility related to AltaGas's acquisition of WGL Holdings Inc.

Scotiabank acted as sole financial advisor to AltaGas in connection with the Middle River Power transaction.