U.S Geothermal merges with Ormat Technologies striking a $110m deal
Foraying into a definitive agreement to acquire U.S Geothermal, Ormat Technologies strikes a $110 million deal. U.S geothermal, a renewable energy company focused on the development, production and sale of electricity from geothermal energy stock set to seek $5.45 per share in cash. Ormat will pay a total consideration of approximately $109.9 million. The closing of the merger is subject to customary conditions, including receipt of regulatory approvals and approval by persons holding a majority of the outstanding shares of US Geothermal common stock.
As far as the assets are concerned, The operating assets are selling power under existing power purchase agreements at favorable price terms for the electricity, with an aggregated contract capacity of 55MW. U.S. Geothermal is currently operating geothermal power projects at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho for a total designed net output of 45MW that currently generate approximately 38MW net.
Isaac Angel, CEO of Ormat Technologies said “This acquisition significantly broadens and diversifies our operations in the United States, expanding our presence into Idaho and Oregon and giving us additional opportunities as we evaluate U.S. Geothermal’s development pipeline. We are confident we can leverage our unique core capabilities to improve generation and efficiency at the existing plants, utilizing our expertise and proprietary technology. Finally, we have identified operational and financial synergies, efficiencies and cost reductions, based on US Geothermal’s current revenue level, enabling us to improve the profitability of these operations. With this transaction, we demonstrate again the implementation of our business strategy to grow our business with accretive M&A transactions and organic growth, underscoring our commitment to creating sustainable value for our shareholders.”
Image Source: Ormat Technologies