In an acquisition estimated to be worth $190 million, geothermal energy company Magma Energy
has purchased wind, solar and hydro energy company Plutonic Power
. The two Vancouver, Canada-based companies’ merger will create one of the biggest renewable energy companies in Canada
: Alterra Power Corp.
Alterra Power is estimated to be worth $575 million. Magma Energy Chairman and CEO, Ross Beaty, says “size matters… the power business is all about cost of capital.”
Beaty goes on to say, “This merger will strengthen both companies and will create a larger, more diversified renewable energy company with assets across a broader spectrum of the clean energy industry. It has the potential to lower the cost of capital to develop each company’s existing growth assets, to enable those assets to be developed more quickly, and to better attract new opportunities for future development. Geothermal will remain a core focus of the new company, but hydro, wind and solar assets will be solid business platforms for future growth. In the renewable energy business, bigger is better and this combination will achieve that while enhancing returns to each company’s shareholders.”
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Donald McInnes, Plutonic’s Vice-Chairman and CEO said, “2010 was a breakout year for Plutonic having completed the transition into an operating company. To continue to build on the success of our history as a project developer, a merger with Magma will provide our shareholders with the best path to further value creation achieved through a larger market size, greater liquidity, better access to capital, and diversity of geography and technology with a healthy development pipeline that provides significant growth opportunities.”
Magma Energy currently operates various geothermal projects throughout the U.S., Iceland and Latin America. Plutonic Power has specialized in wind farms throughout Canada and has been looking into the solar power market in the U.S. Together as Alterra Power Corp., these two companies are seeking projects that will provide the best return on investment for shareholders, whether they be domestic throughout Canada, or abroad.