Acquisition of CPDQ’s 49% stake in 3 wind farms

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Boralex becomes the sole owner of 3 wind farms in Quebec, with an installed capacity of 296 MW

MONTREAL, November 20, 2020 / PRNewswire / – Boralex inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to announce that it has entered into a definitive agreement to acquire all of the 49% of the capital held by the Caisse de dépôt et placement du Québec (“CDPQ ») In 3 wind farms in Quebec, already 51% owned by Boralex. La Caisse’s 49% stake represents a net installed capacity of 145 MW and the three wind farms represent a total capacity of 296 MW. Located in the MRC d’Avignon in Gaspésie and the MRC des Appalaches in the east Quebec, these wind farms are equipped with Enercon turbines and benefit from long-term electricity purchase contracts (“PPAs”) with Hydro-Québec Distribution, maturing between 2032 and 2033 and with a weighted average residual term of nearly 12, 5 years.

“We are very pleased to announce our acquisition of la Caisse’s stake in high-quality wind farms that we already own at 51% and that we have been managing for more than two years following our acquisition of Invenergy’s stakes in these wind farms. active. The operation of these wind farms provided the synergies and produced results 10% better than what we expected in 2019 ”, states Patrick Lemaire, President and Chief Executive Officer of Boralex.

“This transaction strengthens our position in the wind industry by Canada and is perfectly aligned with the growth direction of our strategic plan. The acquisition of the Caisse’s stake will add significant liquidity for the next few years and a positive contribution to the discretionary liquidity per share of the company during the first year following the closing of the transaction. We also expect to generate additional operational and financial synergies over the next few years, ”adds Patrick Decostre, Vice-President and Chief Operating Officer of Boralex.

As part of the acquisition, Boralex will pay cash consideration of $ 121.5 million at the Caisse at closing, which may be supplemented by a contingent consideration of up to $ 4 million subject to the settlement of certain future conditions which must be met. Closing should take place at the end of november 2020, subject to standard closing conditions. Following this transaction, Boralex’s installed capacity will be 2,212 MW.

Strong points

  • Acquisition price: $ 121.5 million in cash payable at closing and an additional amount of up to $ 4 million after closing, subject to the settlement of certain conditions which must be met;
  • Adds a net capacity of 145 MW to the installed capacity of Boralex;
  • Long-term contracts expiring between 2032 and 2033 with an average remaining term of almost 12.5 years;
  • Additional annual contribution of wind farms to Boralex’s results:
    • $ 31 million to the combined EBITDA representing the acquisition of the 49% interest in the Caisse;
    • $ 62 million to EBITDA according to IFRS representing 100% of the EBITDA of the wind farms which will henceforth be consolidated in the financial statements of the Company;
    • $ 10 million Where $ 0.10 per share to discretionary cash flow, an increase of 8% compared to the consolidated amount generated by Boralex in 2019;
  • Additional operational and financial synergies expected.

Description of the wind farm
Moulins I wind farm (136 MW) is located in the MRC des Appalaches in Quebec. This park has 59 E-82 wind turbines. Moulins II wind farm (21 MW) is located in the MRC d’Avignon in Gaspésie, Quebec. This park has nine E-92 wind turbines. Both farms are covered by an existing PPA which expires in December 2033.

Plateau I wind farm (139 MW) is located in the MRC d’Avignon in Gaspésie, Quebec. This park has 60 E-70 E4 wind turbines and is covered by an existing PPA which expires in March 2032.

Each wind farm is financed in the long term by consortia of international financial institutions. Funding consists of a combination of variable interest rate term loans (much of which is covered by interest rate swaps) and fixed rate notes or loans. Project debt to September 30, 2020, totaled $ 402 million (the 49% stake is therefore $ 197 million).

Questions relating to related party transactions
The Caisse holds approximately 17.28% of the issued and outstanding common shares of the Company as of November 20, 2020. The acquisition could be considered as a “related party transaction” according to MI 61-101 for the protection of holders of minority securities in special transactions (MI 61-101). The Company has availed itself of the exceptions for the assessment and approval of minority holders in paragraphs 5.5 (a) and 5.7 (a) of NI 61-101.

The two independent directors representing the Caisse on the board of directors of Boralex did not participate in the discussions on the acquisition and abstained from voting on these issues.

About Boralex
Boralex develops, builds and operates renewable energy facilities in Canada, France, the UK and United States. A leader in the Canadian market and from France the largest independent producer of onshore wind energy, the Company is recognized for its solid experience in optimizing its asset base in four types of energy production: wind, hydroelectric, thermal and solar. Boralex ensures sustainable growth by leveraging the expertise and diversification developed over 30 years. Boralex shares are listed on the Toronto Stock Exchange under the symbol “BLX”.

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Caution Regarding Forward-Looking Statements

Some of the statements contained in this press release, including those concerning the addition to discretionary cash flows of acquired interests, the increase in discretionary cash flows per Boralex share from acquired interests, the expected contribution to EBITDA of acquired interests, additional operational and financial synergies expected, the expected closing date of the transaction, the contingent consideration payable following the closing, the business model and the growth strategy of the Company are forward-looking statements based on current expectations, within the meaning of securities legislation.

Forward-looking statements are based on important assumptions, including the following: assumptions about the performance that the Company will obtain from interests to be acquired, based on management’s estimates and expectations with respect to factors relating to production and production other factors; assumptions made on EBITDA margins; assumptions made on the situation of the sector and the economic situation in general, competition and the availability of financing.

Although Boralex believes that the expectations reflected in the forward-looking statements presented in this press release are reasonable, Boralex wishes to emphasize that, by their very nature, forward-looking statements involve risks and uncertainties such as their results or the extent to which they are adopts could differ materially from those indicated by or underlying such statements, or could have an impact on the degree of realization of a particular forward-looking statement.

Unless otherwise specified by the Company, forward-looking statements do not take into account the possible impact on its activities, transactions, non-recurring or other exceptional items announced or occurring after the statements. There can be no assurance as to the materialization of results, performance or achievements as expressed or implied by forward-looking statements. The reader is cautioned not to place undue reliance on these forward-looking statements.

Unless required to do so under applicable securities laws, Boralex management assumes no obligation to update or revise forward-looking statements to reflect new information, future events or other changes. .

SOURCE Boralex inc.

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