Hydro One To Buy Avista In C$6.7 Bln Deal - Quick Facts

(RTTNews) - Hydro One Limited (H.TO) and Avista Corp. (AVA) announced a merger agreement under which Hydro One will acquire Avista for C$67 per share in a C$6.7 billion all-cash transaction. The deal was unanimously approved by the Boards of both companies and is expected to close in the second half of 2018. No workforce reductions are anticipated as a result of the transaction for either Avista or Hydro One. The companies noted that the deal establishes one of North America's largest regulated utilities with over C$32.2 billion in assets.

Hydro One will finance the transaction through a combination of medium and long-term borrowings amounting to approximately C$3.4 billion together with C$1.4 billion contingent convertible debentures represented by instalment receipts, which will form the permanent equity component of the financing plan upon conversion at closing of the transaction. The transaction will be accretive to earnings per share in the mid-single digits in the first full year of operation. The acquisition provides additional support to Hydro One's dividend, and its 70-80 percent targeted dividend payout ratio will remain unchanged upon completion of the transaction.

Following completion of the transaction, Avista will maintain its existing corporate headquarters in Spokane and will continue to operate as a standalone utility in Washington, Oregon, Idaho, Montana and Alaska. Its management team and employees will remain in place and it will operate with its own Board representing the interests of the Pacific Northwest and the communities it serves. The combined company's headquarters will be based in Toronto.