Maxim Power Corp. (TSX:MXG) announced that it has entered into an agreement to sell 100% of its ownership interest in its wholly-owned subsidiary Maxim Power (USA), Inc. to an affiliate of Hull Street Energy, LLC, for an implied enterprise value of $106 million USD inclusive of anticipated working capital. Net proceeds to MAXIM after accounting for debt and transaction costs are anticipated to be $84 million USD.
MUSA is MAXIM’s wholly-owned subsidiary that owns and operates MAXIM’s five natural gas-fired electric generation facilities in the United States. These facilities have an aggregate generating capacity of 446 megawatts.
Hull Street Energy is a specialized private equity firm that targets power generation assets and other related businesses that are strategically positioned to benefit as the electricity industry transitions to a more sustainable future.
MAXIM intends to hold a special meeting of the shareholders to seek approval of the disposition during the first quarter of 2017. MAXIM shareholders, including all of its directors and officers, who collectively own or control approximately 42% of the outstanding common shares, have committed to vote in favour of the Transaction. The Transaction is anticipated to close during the first quarter of 2017, subject to receipt of all applicable regulatory approvals, MAXIM shareholder approval, completion of the buyer’s financing, and the satisfaction of other closing conditions customary for a transaction of this nature.
Credit Suisse is acting as financial advisor to the board of directors of MAXIM for purposes of the Transaction. Following an extensive review and analysis of the Transaction and the consideration of other available alternatives, and after consulting with its financial and legal advisors, including the receipt of an opinion from its financial advisor as to the fairness from a financial point of view of the consideration to be received by MAXIM in the Transaction (such opinion as of the date of the opinion and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on review undertaken), the board of directors of MAXIM has unanimously determined that the Transaction is in the best interests of MAXIM and has approved the terms of the Agreement and unanimously recommends that shareholders of MAXIM vote in favour of the Transaction at the special meeting of MAXIM shareholders expected to be held in February 2017 to consider and approve the Transaction.
MUSA sale proceeds will be held by MAXIM for strategic corporate purposes, including providing the potential opportunity for MAXIM to invest in new projects in Alberta’s power market which is expected to undergo significant reforms in the coming years. MAXIM currently owns and operates a number of operating and development stage projects and assets in Alberta, including HR Milner, a 150 MW coal-fired generating facility located near the town of Grande Cache, Alberta.
Further information regarding the Transaction will be contained in an information circular that MAXIM will prepare, file and mail in due course to its shareholders in connection with the special meeting of MAXIM shareholders. A copy of the Agreement will be available under the Corporation’s SEDAR profile at www.sedar.com.
About MAXIM
Based in Calgary, Alberta, MAXIM is an independent power producer, which acquires or develops, owns and operates innovative and environmentally responsible power and power related projects. MAXIM currently owns and operates 7 power plants in Alberta and the United States, having 603 MW of electric generating capacity. MAXIM trades on the TSX under the symbol “MXG”. For more information about MAXIM, visit our website at www.maximpowercorp.com.
About Hull Street Energy
Hull Street Energy is a private equity firm that acquires, optimizes and grows power businesses through the application of industry leading risk management, efficiency enhancements and commodity contract structuring. Headquartered in Bethesda, Maryland, the team leverages its decades of experience and unique knowledge of North American electricity infrastructure, including fuel inputs, generation assets, transmission and distribution systems, and demand focused businesses such as retail supply, distributed generation, and micro-grid systems to build value for our investors and stakeholders. For further information about Hull Street Energy please see www.hullstreetenergy.com.
