Capital Power has announced the strategic acquisition of two flexible generation assets in the US for $2.2bn: the 1,124MW Hummel station in Pennsylvania and the 1,023MW Rolling Hills plant in Ohio.
The transaction will close in the third quarter of 2025.
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The move positions Capital Power among the top five North American independent power producers with more than 10GW of natural gas capacity.
The acquisition aligns with the company’s strategy to expand in the US and the PJM [Pennsylvania, New Jersey, Maryland] market.
Capital Power expects the acquisition to generate an average annual adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) of approximately $443m from 2026 to 2030.
To fund the acquisition, the company has launched a $500m common share offering, fully covering the equity funding requirement.
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By GlobalDataAdditional funding will be sourced from cash reserves, debt financing and credit facilities.
A commitment letter dated 14 April 2025 with a Canadian chartered bank affiliate of TD Securities secures $2bn in senior unsecured term loans.
Capital Power also has access to $1bn under its existing revolving credit facilities, ensuring financial flexibility and maintaining its investment-grade credit rating.
Capital Power president and CEO Avik Dey stated: “Capital Power’s acquisition of Hummel and Rolling Hills expands our US generation fleet and advances our position as a leading North American power producer.
“With our expansion into the largest and most liquid power market in North America, we continue to deliver on our strategy. These plants will bolster our flexible generation portfolio and align with our commitment to provide reliable, affordable power solutions that support a balanced approach to energy expansion.
“As a leading operator in North America, our ability to integrate these assets, optimise performance and enhance returns through our robust trading platform underpins the long-term value we expect these acquisitions will provide for our shareholders.”
The company partnered with TD Securities and CIBC Capital Markets to issue 8,060,000 common shares at $43.45 per share, raising $350m.
An over-allotment option could increase proceeds to $403m and a private placement with the Alberta Investment Management Corporation will raise $150m.
The public offering and private placement are set to close around 22 April 2025.
The proceeds will fund the acquisition, with alternative plans for future growth opportunities if the acquisition does not complete.
The funding plan ensures Capital Power’s financial stability and supports its strategic growth initiatives.
