UK-based ContourGlobal has reached an agreement to acquire Mexican chemical manufacturing company Alpek’s portfolio of two natural gas-fired combined heat and power (CHP) plants.

Valued at $801m, the acquisition also includes development rights and permits for a third plant.

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The company will pay $724m in cash and an additional payment of $77m at closing as value-added tax (VAT), which is expected to be refunded in full within 12 months of closing.

Located on sites next to Alpek’s industrial facilities, the Cosoleacaque and Altamira cogeneration power plants have a gross installed capacity of 518MW.

ContourGlobal president and CEO Joseph Brandt said: “We are delighted to expand our cogeneration solutions business into Mexico with the acquisition of Alpek’s combined heat and power plants. 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.

“We are closer to achieving this objective with this acquisition, which we expect to add approximately $110m to our adjusted EBITDA in the first full year of operations.”

“This accretive transaction fits squarely into our strategic and financial approach to acquisitions. It was highlighted during our IPO and reflects our commitment to pursue high-quality growth through operationally led strategic acquisitions and to double adjusted EBITDA without issuing new equity within five years of our listing.

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“We are closer to achieving this objective with this acquisition, which we expect to add approximately $110m to our adjusted EBITDA in the first full year of operations.”

The two CHP plants will supply electricity and steam to subsidiaries of Alfa, a Mexican industrial conglomerate, and other commercial and industrial customers.

The acquisition is reported to be in line with ContourGlobal’s strategy of developing and operating power assets supported by long-term contracts.

In addition, ContourGlobal is planning to acquire the development rights and permits for a third adjacent plant with a planned capacity of 414MW.