Ormat Signs Definitive Agreement to Acquire U.S. Geothermal
January 24 2018 - 8:30AM
Ormat Technologies Inc. (NYSE:ORA) announced today that it has
entered into a definitive agreement to acquire U.S. Geothermal,
Inc. (NYSE American:HTM), a renewable energy company focused on the
development, production and sale of electricity from geothermal
energy. Under terms of the merger agreement, holders of U.S.
Geothermal common stock will receive $5.45 per share in cash. On
fully diluted basis, including payment to U.S. Geothermal’s option
holders, 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. The transaction is expected to close in
the second quarter of 2018.
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. In addition,
U.S. Geothermal is developing additional projects at the Geysers,
California; a second phase project at San Emidio, Nevada; at
Crescent Valley, Nevada; and the El Ceibillo project located near
Guatemala City, Guatemala.
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. Upon
plans to improve the acquired portfolio and implementation of
synergies and cost reductions Ormat expects to improve
profitability of the operating projects by approximately 50% during
2019.
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.”
Legal Advisors
Norton Rose Fulbright is serving as Ormat's
legal counsel.
ABOUT ORMAT TECHNOLOGIES
With over five decades of experience, Ormat
Technologies, Inc. is a leading geothermal company and the only
vertically integrated company engaged in geothermal and recovered
energy generation (REG), with the objective of becoming a leading
global provider of renewable energy. The company owns, operates,
designs, manufactures and sells geothermal and REG power plants
primarily based on the Ormat Energy Converter – a power generation
unit that converts low-, medium- and high-temperature heat into
electricity. With 73 U.S. patents, Ormat’s power solutions have
been refined and perfected under the most grueling environmental
conditions. Ormat has 530 employees in the United States and 720
overseas. Ormat’s flexible, modular solutions for geothermal power
and REG are ideal for the vast range of resource characteristics.
The company has engineered, manufactured and constructed power
plants, which it currently owns or has installed to utilities and
developers worldwide, totaling over 2,200MW of gross capacity.
Ormat is the largest US-based geothermal operator with its current
800MW generating portfolio spread globally in the U.S., Guatemala,
Guadeloupe, Honduras, Indonesia and Kenya. Ormat also intends to
expand its operations and provide energy management and energy
storage solutions, by leveraging its core capabilities and global
presence.
ORMAT'S SAFE HARBOR STATEMENT
Information provided in this press release may
contain statements relating to current expectations, estimates,
forecasts and projections about future events that are
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
generally relate to Ormat's plans, objectives and expectations for
future operations and are based upon its management's current
estimates and projections of future results or trends. These
include, among other things, statements about opportunities for
improved generation and efficiency of US Geothermal’s operating
projects, significant cost savings and operational and financial
synergies, and Ormat’s expectation that it can improve
profitability of the operating projects. Actual future results may
differ materially from those projected as a result of certain risks
and uncertainties. For a discussion of such risks and
uncertainties, see "Risk Factors" as described in Ormat
Technologies, Inc.'s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 1, 2017.
These forward-looking statements are made only
as of the date hereof, and we undertake no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
Ormat Technologies Contact:Smadar LaviVP
Corporate Finance and Investor Relations 775-356-9029 (ext.
65726)slavi@ormat.com
Investor Relations Agency Contact:Rob FinkHayden
IR646-415-8972rob@haydenir.com
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