Hydro One Inc. entered into a purchase agreement to buy units of Brookfield Infrastructure that own and control Great Lakes Power Transmission LP, for $222 million in cash, subject to customary adjustments, plus the assumption of about $151 million in outstanding indebtedness.
Great Lakes Power Transmission is an Ontario-regulated electricity transmission business operating along the eastern shore of Lake Superior, north and east of Sault Ste. Marie, Ontario.
The Great Lakes Transmission business has a rate base of about $219 million, and it consists of 15 transmission stations, 347 miles of high and medium voltage 44-230 kV transmission lines, and related infrastructure covering an area of 4,633 square miles and connects to Hydro One's Wawa and Mississagi transmission stations.
Upon completion of the transaction, Hydro One will operate about 98 percent of Ontario's transmission capacity.
"Following Hydro One's successful IPO and the recent acquisition of three Local Distribution Companies, this transaction is further testament to the people and potential of Hydro One," said Mayo Schmidt, President and CEO, Hydro One Limited. "Our intense focus on customers and communities together with our disciplined approach to leveraging strategic opportunities is an important combination as we move forward with the transformation of this company."
The transaction is conditional upon the satisfaction of customary closing conditions, including receipt of Competition Act (Canada) approval and approval of the Ontario Energy Board.
National Bank Financial Markets acted as financial advisor and Osler, Hoskin & Harcourt LLP acted as legal counsel to Hydro One in connection with the transaction.