Date Closed

November 5, 2011

Lead Office

Toronto

Value

1.10 Billion CAD

On November 5, 2011, Atlantic Power Corporation, pursuant to a plan of arrangement under the Canada Business Corporations Act, acquired all of the outstanding partnership units of Capital Power Income L.P. held by unitholders of CPILP other than Capital Power Corporation and acquired from EPCOR Utilities Inc. and CPC all of the shares of CPI Investments Inc., a corporation that owned approximately 29% of the outstanding units of CPILP. Each partnership unit was acquired for C$19.40 in cash or 1.3 Atlantic Power common shares, resulting in an aggregate purchase price of approximately C$1.1 billion which was satisfied by the payment of C$506.5 million of cash and the issuance by Atlantic Power of approximately 31.5 million common shares. In connection with the closing of the acquisition, CPILP sold its two North Carolina biomass plants to CPC for a purchase price of approximately C$121 million.     

The cash portion of the purchase price was financed by an equity offering of C$168 million and a high yield note offering of US$460 million. On October 19, 2011, Atlantic Power completed a public offering of 12,650,000 common shares of Atlantic Power that included 1,650,000 common shares issued pursuant to the exercise in full of the underwriters’ over-allotment option at a purchase price of US$13.00 or $13.26 per common share for aggregate gross proceeds of approximately C$168 million. The underwriting syndicate included TD Securities Inc., Morgan Stanley & Co. LLC, BMO Nesbitt Burns Inc., Desjardins Securities Inc., Scotia Capital Inc. and Macquarie Capital Markets Canada Ltd. On November 4, 2011, Atlantic Power completed a private placement of US$460 million of its 9% senior notes due 2018. Morgan Stanley & Co. LLC, TD Securities (USA) LLC and Macquarie Capital (USA) Inc. acted as the lead agents.

In connection with the closing, Atlantic Power entered into an amended and restated senior secured credit agreement with Bank of Montreal, Union Bank, Toronto Dominion and Morgan Stanley, pursuant to which Atlantic Power increased its capacity under its existing credit facility from US$100 million to US$300 million on a senior secured basis.

As a result of this transaction, Atlantic Power has nearly doubled its market capitalization and assets, expanded its operations into Canada with a 143%  increase in power generation capacity to 2,116 MW and has brought an operating platform through the transfer of CPC operating employees to Atlantic. The combined portfolio of assets consists of interests in 30 operational power generation projects across 11 states and two provinces, one 53 MW biomass project under construction in Georgia, and an 84-mile, 500 kilovolt electric transmission line located in California. Atlantic Power also owns a majority interest in Rollcast Energy, a biomass power plant developer with several projects under development. Atlantic Power is incorporated in British Columbia, headquartered in Boston, and as a result of the acquisition of CPILP has added offices in Chicago, Toronto, and Richmond, BC.

CPILP, headquartered in Edmonton, Alberta, was a limited partnership that owned power generation assets in Canada and the United States.

McCarthy Tétrault LLP acted as Canadian counsel to Bank of Montreal, the administrative agent for the lenders, with a team led by Stephen Furlan, Ana Bdaour, and Emily Ng.