Ormat Closes Acquisition Of U.S. Geothermal
April 24 2018 - 9:50AM
Ormat Technologies, Inc. (NYSE:ORA) announces
that it has closed the previously announced acquisition of U.S.
Geothermal, Inc. (NYSE:HTM) for a total consideration of
approximately $110 million, comprising approximately $106 million
funded in cash by the Company to acquire the outstanding shares of
common stock of USG, and approximately $4 million, funded from
available cash of USG, to cash-settle outstanding in the money
options to acquire outstanding shares of USG.
As a result of the acquisition, Ormat now owns
and operates U.S. Geothermal's three power plants at Neal Hot
Springs, Oregon, San Emidio, Nevada and Raft River, Idaho with a
total net generating capacity of approximately 38 MW. In addition,
Ormat now owns development assets held by US Geothermal, which
include a project at the Geysers, California; a second phase
project at San Emidio, Nevada; a greenfield project in Crescent
Valley, Nevada; and the El Ceibillo project located near Guatemala
City, Guatemala.
The operating assets sell power under existing
power purchase agreements at favorable price terms for the
electricity, with an aggregated contract capacity of 55 MW. Ormat
plans to improve the acquired operating assets and implement
synergies and cost reductions which are expected to improve
profitability of the operating projects by approximately 50% during
2019.
Ormat has put in place a comprehensive
integration plan to assure continuous operation of U.S.
Geothermal's assets. The Company is pleased to retain a number of
U.S. Geothermal employees and welcome them to Ormat.
“The acquisition of U.S. Geothermal expands our
geothermal portfolio and our prospect inventory. We see many
opportunities to improve efficiency and capacity over the next
couple of years,” said Isaac Angel, CEO of Ormat Technologies. “As
a leading vertically integrated geothermal company, we expect the
integration will be seamless. We are certain that together with the
skilled employees that we will retain we can achieve great
accomplishment and improve the profitability of these operations
and demonstrate the accretive value of this acquisition in the near
term.”
The Company anticipates that the acquisition of
U.S. Geothermal, Inc. will be additive to its electricity segment
2018 revenue in the amount of approximately $23 million and will
reflect approximately $13 million in incremental EBITDA and
Adjusted EBITDA1. The expected EBITDA and Adjusted EBITDA
attributable to the non-controlling interest is approximately $4
million.
On May 7, 2018, the Company will issue financial
results for the first quarter of 2018, at which time it will
provide a more comprehensive update on full year 2018 guidance
inclusive of this acquisition.
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 77 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 770
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 2,500 MW of gross capacity.
Ormat’s current approximately 800 MW generating portfolio is spread
globally in the U.S., Guatemala, Guadeloupe, Honduras, Indonesia
and Kenya. In March 2017, Ormat expanded its operations to provide
energy storage and energy management solutions, by leveraging its
core capabilities and global presence as well as through its
Viridity Energy Solutions Inc. subsidiary, a Philadelphia-based
Company with nearly a decade of expertise and leadership in energy
storage, demand response and energy management.
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 (including statements about plans to improve the
acquired operating assets, synergies, cost reductions and
profitability and the statements about increased revenue and
incremental EBTIDA and Adjusted EBITDA expected to result from the
acquisition) and are based upon its management's current estimates
and projections of future results or trends. 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 Form 10-K filed with the SEC on March 16,
2018.
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 Lavi VP Corporate Finance and Head of
Investor Relations 775-356-9029 (ext.
65726)slavi@ormat.com |
Investor
Relations Agency Contact: Rob Fink Hayden - IR
646-415-8972rob@haydenir.com |
_______________________________________________
1The Company is unable to provide a
corresponding GAAP equivalent for its EBITDA and Adjusted
EBITDA. In providing Adjusted EBITDA, the Company notes that
there could be differences between expected reported GAAP net
income and estimated GAAP net income for matters such as, but not
limited to (i) unrealized gains or losses related to derivative
transactions; (ii) unrealized foreign currency gains or losses;
(iii) gains or losses and associated benefits and costs due to
disposition and acquisition of business interests, including the
tax impact of the repatriation of proceeds from sales in foreign
jurisdictions; (iv) losses due to impairments; (v) gains, losses
and expenses related to prepayment of debt and (vi) tax benefit or
expense related to effects of the recently-enacted U.S. tax law
reform.
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