EPCOR Utilities' reorganization and completion of C$500 million initial public offering and acquisition of C$5 billion of assets

Date Closed: 7/09/2009

Value: C$5 billion

On July 9, 2009, EPCOR Utilities Inc. (EPCOR), and Capital Power Corporation and its subsidiaries (Capital Power) closed Capital Power's initial public offering of common shares and the acquisition of the power generation assets and operations from EPCOR.

The initial public offering of 21,750,000 common shares was sold to investors at a price of $23.00 per share, resulting in gross proceeds to the Company of just over $500 million, and making it Canada's largest IPO since 2007. The offering was underwritten by a syndicate led by TD Securities Inc. and Goldman Sachs Canada Inc. The underwriters have been granted an overallotment option, which expires in 30 days, to purchase up to an additional 3,262,500 common shares. If the over-allotment option is exercised in full, the total gross proceeds to Capital Power will be just over $575 million, and the net proceeds will be $539 million after deducting underwriters' commissions and transaction costs.

The proceeds were used in the acquisition of the power generation assets and operations from EPCOR and result in Capital Power holding a 27.8% interest in Capital Power LP. The total consideration for the acquisition of EPCOR's power generation assets was comprised of $468 million in cash, 56.625 million exchangeable Capital Power LP units (representing an approximate 72.2% equity interest in Capital Power LP) and $896 million of back-to-back debt owed to EPCOR.

BLG represented RBC Capital Markets and the EPCOR bank syndicate, which restructured the terms of $1.3 billion of EPCOR's debt. Tom Pepevnak led the team from BLG, which also included Lindsay Holmes, Angie Redecopp, Mike Hrabok and Scott McLeman.