Capital Power Announces Strategic Acquisition of Two Flexible Generation Assets in PJM and a $500 Million Offering of Common Shares

Acquisition Overview - Capital Power Corporation announced a definitive agreement to acquire Hummel Station and Rolling Hills for a net purchase price of US$2.2 billion (~CAD$3.0 billion), expected to close in Q3 2025, subject to regulatory approvals [2][3] - The acquisition will position Capital Power as one of five North American independent power producers (IPPs) with over 10 GW of natural gas capacity, adding 2.2 GW to its Flexible Generation portfolio [3][4] Strategic Positioning - The acquisition aligns with Capital Power's strategy to expand in the U.S. and PJM market, the largest and most liquid power market in North America, enhancing its strategic positioning [4][6] - Hummel Station and Rolling Hills are high-quality assets that support the reliability of PJM's electricity grid and provide growth opportunities in North America [4][6] Financial Impact - The acquisition is expected to generate average annual Adjusted EBITDA of approximately CAD$443 million for the 2026-2030 period and be accretive to Adjusted Funds from Operations (AFFO) per share by approximately 17-19% over the same period [5][6] - The valuation of the acquisition is approximately 7x the 5-year average enterprise value (EV) to Adjusted EBITDA, which is comparable to previous acquisitions by Capital Power [5][6] Financing Strategy - Capital Power plans to finance the acquisition through a combination of a $500 million common share offering and existing credit facilities, maintaining its strong investment-grade credit rating [8][9] - The company has entered into a commitment letter for fully underwritten $2 billion senior unsecured term loans to support the acquisition financing [7][16] Market Expansion - The acquisition continues Capital Power's North American expansion and diversification strategy, ensuring no single market will represent more than 30% of net capacity [4][6] - The company aims to leverage its expertise in plant operations and power trading to optimize the newly acquired assets and drive long-term value [3][6]