7th Jan 2019 07:52
LONDON (Alliance News) - ContourGlobal PLC on Monday said it agreed to acquire Alpek SAB de CV's portfolio of two natural gas-fired combined heat and power plants, together with development rights and permits for a third plant, for USD724 million in cash.
The mid-cap power generation company said the two plants will provide electricity and steam under long-term contracts to subsidiaries of Alfa SAB de CV and other commercial and industrial customers.
Alfa is a Mexican diversified group of businesses that produces petrochemicals, aluminium auto components, and refrigerated foods.
The two plants are located on sites adjacent to, and interconnected with, Alpek's industrial facilities in the Mexican states of Veracruz and Tamaulipas, and have a gross installed capacity of 518 megawatts.
Additionally, ContourGlobal said it intends to acquire the development rights and permits for a third adjacent plant with a planned capacity of 414 megawatts.
"We are delighted to expand our cogeneration Solutions business into Mexico with the acquisition of Alpek's combined heat and power plants," said ContourGlobal President & Chief Executive Joseph Brandt.
"We have developed our Solutions business over the past decade with blue chip clients like Alpek and look forward to powering their growth over the long-term," added Brandt.
The acquisition is subject to the approval of ContourGlobal's shareholders, with the completion expected to occur in the second quarter of 2019.
The purchased assets are expected to deliver earnings before interest, taxes, depreciation, and amortization contribution of USD110 million in their first full year of operations. ContourGlobal said the plants benefit from dollar denominated contracts for electricity and steam with blue-chip clients.
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