SIMEC Atlantis Energy to acquire SIMEC Green Highland Renewables and its hydro assets

Atlantis has conditionally agreed to acquire SIMEC Green Highland Renewables at an agreed enterprise value of £124.7 million (US$161 million) from the SIMEC group, part of the GFG Alliance.

Agreed enterprise value of £124.7 million (US$161 million) reflects that SIMEC GHR will be acquired with up to £95 million (US$123 million) of long-term project financing already in place on terms satisfactory to Atlantis. In addition, GHR will benefit from a £24 million (US$31 million) capex facility to fund all planned future capex needs as well as a £2 million (US$2.5 million) revolving credit facility.

Taking into account the long-term project financing of up to £95 million (US$123 million), it is expected that at completion of the acquisition a maximum amount of £29.7 million (US$38 million) will be paid for SIMEC GHR comprising: (i) a cash amount of £14.85 million (US$19.17 million) for the shares of SIMEC GHR and the partial repayment of existing SIMEC GHR debt; and (ii) in the event that such repayment is to be funded by an equity fundraising, Atlantis will issue such number of ordinary shares so that the SIMEC group will, following completion of the acquisition, continue to own approximately 49.99 percent of the company’s issued ordinary share capital (such equity value not to exceed £14.85 million), thus resulting in an agreed enterprise value of £124.7 million.

SIMEC GHR has developed a portfolio of operational, cash generating, hydro-electric assets benefitting from long-term renewable energy support. The portfolio has a total operational capacity of 20 MW, producing 87 GWh per annum. All projects within the portfolio benefit from 20 year fixed price feed-in-tariff payments from commercial operations date which are indexed annually to the Retail Price Index. In addition, there is one project under construction and one project in development which will, together, increase capacity by 8 MW.

On completion, the acquisition is expected to be both immediately earnings and cash flow accretive to Atlantis with strong revenue growth expected between 2019 and 2021.

Completion of the acquisition is subject to the fulfilment of a number of conditions precedent, including the completion by Atlantis of its due diligence on SIMEC GHR. The board expects the acquisition to complete in the first quarter of 2019.