Capstone Infrastructure Corporation
(TSX:CSE)(TSX:CSE.PR.A)(TSX:CSE.DB.A) ("CSE" or the "Corporation")
today announced it has acquired a 70% interest in Bristol Water,
which is a regulated water utility in the United Kingdom, from SUEZ
ENVIRONNEMENT through its subsidiary, AGBAR (Sociedad General de
Aguas de Barcelona), for approximately $215 million. The purchase
price was funded through a combination of existing credit
facilities, cash on hand and a new $150-million senior debt
facility. All amounts are in Canadian dollars unless otherwise
noted.
"Bristol Water is an established, core infrastructure business
with regulated and predictable inflation-linked cash flow and a
strong growth profile in a stable OECD country, making it an ideal
complement to our existing portfolio," said Michael Bernstein,
President and Chief Executive Officer of the Corporation. "This is
a platform investment that builds on our international footprint,
diversifies our portfolio by infrastructure category, and is
expected to contribute to the long-term sustainability of our
dividends to shareholders. We are equally delighted to partner with
AGBAR, which brings more than 140 years of experience in the water
sector globally and shares our commitment to quality service,
outstanding performance and efficient, environmentally responsible
operations."
SUEZ ENVIRONNEMENT, through its subsidiary AGBAR, will continue
to hold a 30% interest in Bristol Water. AGBAR, which is
headquartered in Spain with operations in nine countries, is
approximately 75% owned by SUEZ ENVIRONNEMENT, which is a world
leader in water and waste management services. AGBAR will continue
to provide strategic counsel on trends and operational innovations
within the global water services industry under an operational and
management agreement.
Josep Bague, Chief Financial Officer and General Secretary of
AGBAR, stated, "We are delighted to have secured, in Capstone, a
long-term partner for Bristol Water. Bristol Water has a track
record of excellent operational performance and is poised for rapid
expansion in the years ahead. The Capstone team brings significant
infrastructure investment and management expertise, including in
the water utility sector, and a strong commitment to building
lasting stakeholder relationships. Capstone is an ideal fit for
Bristol Water and we look forward to a long and successful
partnership."
Investment Merits
This acquisition will significantly increase the size, value and
diversity of the Corporation's portfolio and is expected to deliver
stable cash flow to shareholders:
-- Platform investment in a new core infrastructure category. The
acquisition of Bristol Water provides the Corporation with a platform
investment in a new infrastructure category, positioning it to pursue
additional growth opportunities in the water infrastructure sector
globally.
Numerous North American, European and Australian pension funds
and other institutional investors have emerged in recent years as
significant investors in the water infrastructure sector, seeking
the stable, long-term cash flow and growth potential offered by
water utilities. The average annual global investment needed to
repair, maintain, improve and build new water and wastewater
infrastructure is estimated to be US$772 billion per year by
2015.(1)
-- Diversifies the Corporation's cash flow by asset type and geography.
With this acquisition, the Corporation extends its footprint in Europe
and diversifies its portfolio by asset type. In 2012, approximately 18%
of the Corporation's Adjusted Funds from Operations ("AFFO") is
anticipated to be generated by Bristol Water. Varmevarden, the
Corporation's district heating business in Sweden, is anticipated to
contribute approximately 11%; the Cardinal gas cogeneration facility,
42%; Erie Shores Wind Farm, 10%; the hydro power facilities, 7%; the
Whitecourt biomass facility, 5%; the Amherstburg Solar Park, 5%; and the
Chapais biomass facility, 2%.
-- Regulated, perpetual business that offers long-term cash flow and value
accretion. As a perpetual business with a strong competitive position,
Bristol Water significantly extends the average life of Capstone's cash
flows. Additionally, the regulated nature of the business provides for
recovery of operating costs and allowance for a fair return.
-- Expected to deliver an attractive total return. The Corporation's
investment in Bristol Water is expected to deliver a total return(2) at
the lower end of the Corporation's targeted 10 - 14% range, reflecting
the quality, stability and longevity of Bristol Water's business.
Key Transaction Metrics
The terms of the Corporation's acquisition of Bristol Water
imply a value equal to approximately 1.2 times(3) the regulated
capital value ("RCV") of the business and an EV/EBITDA multiple of
approximately 8.2 times(4), comparing favourably with recent
transactions in the sector. The RCV of the business as at the
fiscal year ended March 31, 2011 was approximately $505 million.
The enterprise value of the business was approximately $617
million(5) as at June 30, 2011.
Key Business Drivers
Founded in 1846 and located in the Bristol region of the United
Kingdom, Bristol Water is responsible for the abstraction,
treatment, storage and distribution of water, supplying
approximately 278 million litres of water every day to over 1.1
million people and businesses in an area of approximately 2,400
square kilometres. Bristol Water's system encompasses: 26 water
sources, including reservoirs, rivers, springs and wells; 6,670
kilometres of water mains; 164 pumping stations; and 139 covered
storage reservoirs. Bristol Water, which has approximately 440
employees, is one of 11 regulated Water-Only Companies ("WOC") in
England and Wales and is the sole water supplier in the Bristol
area. Bristol Water has a history of stable cash flow and is
expected to achieve annual growth in Adjusted EBITDA of
approximately 8% from 2012 to the end of the current asset
management plan period ("AMP5"), which runs until March 2015.
Key drivers of Bristol Water's business include:
-- A stable regulatory regime. Bristol Water is regulated by the UK Water
Services Regulation Authority ("Ofwat") through a price cap mechanism on
five-year rate cycles. The current five-year period is AMP5. The revenue
target set by Ofwat provides for recovery of operating costs and allows
for a reasonable return on invested capital. Bristol Water's revenues
have historically increased in line with the regulatory allowance and
feature a real as well as an inflation component, thereby offering a
natural inflation hedge. For the AMP5 period, the company is targeted to
realize a post-tax real return on equity of 6.60% (pre-inflation) based
on the 40% deemed common equity component of Bristol Water's capital
structure.
-- Continuing capital improvements and rate base growth. Bristol Water
expects to execute a significant capital expenditure program in the
years ahead to maintain and improve its infrastructure and operations,
to continue to meet water quality requirements, and to support growth
arising from an increasing population and expanded business activity in
the region. As a result, the company's RCV is anticipated to grow
considerably. Bristol Water had approximately $132 million of cash on
hand that can be invested in its growth program. Bristol Water's RCV is
anticipated to grow by approximately 26% over the AMP5 period compared
with an industry average of approximately 8% over the same period.
Financing Details
The Corporation's approximately $215 million investment was
funded through a combination of existing credit facilities, cash on
hand and a new $150-million senior debt facility provided by a
subsidiary of Macquarie Group Limited. The senior debt facility
carries a term of 12 months and initially bears monthly interest at
an annual rate equal to the Canadian Dealer Offered Rate ("CDOR")
plus a specified margin. The annual interest rate payable on the
senior debt facility is approximately 4.75% initially and it will
increase to a maximum rate of approximately 7.25% after nine
months, assuming no change in CDOR during that period. Future
sources of capital to refinance the new senior debt facility
include a potential offering of the Corporation's securities,
proceeds from a future recapitalization of Varmevarden,
internally-generated cash flows and the addition of holding company
debt at Bristol Water, or any combination thereof.
Outlook(6)
With the addition of Bristol Water to its portfolio, and
excluding internalization costs, the Corporation expects its fiscal
2011 Adjusted EBITDA to be approximately $75 million compared with
approximately $60 million as previously stated. Based on the
current financing structure, the Corporation expects its 2011
payout ratio, which is based on Adjusted Funds from Operations
("AFFO") and excludes internalization costs, to remain consistent
with the previously provided outlook of approximately 120%.
For 2012, the Corporation now expects Adjusted EBITDA to be
approximately $140 million compared with approximately $80 million
previously. The 2012 payout ratio, which is based on AFFO, is
expected to be consistent with the previously provided outlook of
approximately 85% to 90%. Based on its existing portfolio, outlook
and current dividend level, the Corporation anticipates that its
payout ratio will remain less than 100% through 2014, subject to
the continuing execution of the Corporation's growth strategy,
which could include development projects or businesses with a
strong growth profile that may cause the payout ratio to fluctuate
in any given year.
With the assumption of Bristol Water's approximately $440
million in long-term debt and reflecting the impact of the
transaction financing, the Corporation's debt to capitalization
ratio is expected to increase from 39.3% as at June 30, 2011 to
approximately 60%, an amount consistent with the low risk profile
of the Corporation's business.
Bristol Water's stable, regulated cash flow profile supports the
Corporation's ability to sustain its current dividend of $0.66 per
share on an annualized basis through 2014, subject to any
significant unexpected events or an unfavourable resolution on the
terms of a new contract at the Cardinal gas cogeneration
facility.
Advisers
The Corporation was advised on the transaction by Macquarie
Capital (Europe) Limited, a subsidiary of Macquarie Group
Limited.
Conference Call and Webcast
Management will hold a conference call (with accompanying
slides) today at 9:30 a.m. ET. The event will be accessible via
webcast through the Corporation's website with accompanying slides
at www.capstoneinfrastructure.com and by telephone. To listen to
the call from Canada or the United States, dial 1-800-319-4610. If
calling from elsewhere, dial +1-604-638-5340. A replay of the call
will be available until October 19, 2011. For the replay, from
Canada or the United States, dial 1-800-319-6413 and enter the code
1385#. From elsewhere, dial +1-604-638-9010 and enter the code
1385#.
About Capstone Infrastructure Corporation
Capstone Infrastructure Corporation's mission is to build and
responsibly manage a high quality portfolio of infrastructure
businesses in Canada and internationally in order to deliver a
superior total return to shareholders through a combination of
stable dividends and capital appreciation. The Corporation's
portfolio currently includes investments in gas cogeneration, wind,
hydro, biomass and solar power generating facilities, representing
approximately 370 MW of installed capacity, a 33.3% interest in a
district heating business in Sweden, and a 70% interest in Bristol
Water, a regulated water utility in the United Kingdom. Please
visit www.capstoneinfrastructure.com for more information.
Notice to Readers
Certain of the statements contained in this news release are
forward-looking and reflect management's expectations regarding the
Corporation's future growth, results of operations, performance and
business based on information currently available to the
Corporation. Forward-looking statements are provided for the
purpose of presenting information about management's current
expectations and plans relating to the future and readers are
cautioned that such statements may not be appropriate for other
purposes. These statements use forward-looking words, such as
"anticipate", "continue", "could", "expect", "may", "will",
"estimate", "believe" or other similar words. These statements are
subject to significant known and unknown risks and uncertainties
that may cause actual results or events to differ materially from
those expressed or implied by such statements and, accordingly,
should not be read as guarantees of future performance or results.
The forward-looking statements in this news release are based on
information currently available and what the Corporation currently
believes are reasonable assumptions, including the material
assumptions for each of the Corporation's assets set out in its
fiscal 2010 Annual Report under the heading "Asset Performance" as
updated in subsequently filed Quarterly Financial Reports of the
Corporation and other filings made by the Corporation with the
Canadian securities regulatory authorities (such documents are
available on the Canadian Securities Administrators' System for
Electronic Document Analysis and Retrieval ("SEDAR") at
www.sedar.com). Other material factors or assumptions that were
applied in formulating the forward-looking statements contained
herein include the assumption that the business and economic
conditions affecting the Corporation's operations will continue
substantially in their current state, including, with respect to
industry conditions, general levels of economic activity,
regulations, weather, taxes and interest rates, and that there will
be no unplanned material changes to the Corporation's facilities,
equipment or contractual arrangements.
Although the Corporation believes that it has a reasonable basis
for the expectations reflected in these forward-looking statements,
actual results may differ from those suggested by the
forward-looking statements for various reasons, including risks
related to: power infrastructure (operational performance; power
purchase agreements; fuel costs and supply; contract performance;
development risk; technology risk; default under credit agreements;
land tenure and related rights; regulatory regime and permits;
environmental, health and safety; climate change and the
environment; and force majeure) and the Corporation (tax-related
risks; variability and payment of dividends, which are not
guaranteed; geographic concentration and non-diversification;
insurance; environmental, health and safety regime; availability of
financing; shareholder dilution; and the unpredictability and
volatility of the common share price of the Corporation). There are
also a number of risks related to the Corporation's investment in
Varmevarden, the district heating business in Sweden, including:
fuel costs and availability; industrial and residential contracts;
geographic concentration; regulatory environment; environmental,
health and safety; reliance on key personnel; labour relations;
assumption of liabilities; minority interest; and foreign exchange.
There is also a risk that Varmevarden may not achieve expected
results. There are also a number of risks related to Bristol
Water's business, including operational (contamination or
interruption of water resources/supplies; failure of key assets to
maintain expected outputs; climate/weather pattern change adversely
affecting resource availability), regulatory (failure to meet
existing regulatory requirements; increased costs of meeting
regulatory requirements; impact of legislative changes; including
those related to environmental or drinking water quality
requirements; development of competition within the water sector;
impact of future periodic and/or interim determinations of price
limits by Ofwat) and financial (loss of major customers as a result
of closure of their facilities; pension funding requirements and
changes in pension regulations that could have a significant impact
on future company contributions; worsening debt collection
experience; increases in energy prices; changes in the taxation
regime applicable to the company; failure to meet banking
covenants).
For a more comprehensive description of these and other possible
risks, please see the Corporation's Annual Information Form dated
March 24, 2011 for the year ended December 31, 2010 as updated in
subsequently filed Quarterly Financial Reports and other filings
made by the Corporation with the Canadian securities regulatory
authorities. These filings are available on SEDAR. The assumptions,
risks and uncertainties described above are not exhaustive and
other events and risk factors could cause actual results to differ
materially from the results and events discussed in the
forward-looking statements. These forward-looking statements
reflect current expectations of the Corporation as at the date of
this news release and speak only as at the date of this news
release. Except as may be required by law, the Corporation does not
undertake any obligation to publicly update or revise any
forward-looking statements.
(1) Infrastructure to 2030, Organization for Economic
Cooperation and Development, 2007.
(2) Return range is on a levered and post-tax, post-foreign
exchange hedging basis.
(3) Based on RCV as at fiscal year ended March 31, 2011.
(4) Based on EBITDA for the 12 months ended June 30, 2011.
(5) Enterprise value based on 100% of debt and cash of
approximately $132 million as at June 30, 2011 and assumes a
currency exchange rate of 1 GBP: 1.63 CAD.
(6) The outlook for 2011 excludes the impact of internalization
costs. The outlook for both 2011 and 2012 assumes the impact of the
current financing structure for the acquisition of Bristol Water.
The Corporation's outlook for 2012 also assumes a full year of
contribution from the Amherstburg Solar Park and Varmevarden as
well as a return to 2010 TransCanada Pipelines Limited gas
transportation rates.
Contacts: Capstone Infrastructure Corporation Sarah Borg-Olivier
Vice President, Communications
416-607-5009sborg-olivier@capstoneinfrastructure.com Capstone
Infrastructure Corporation Michael Smerdon Executive Vice President
and CFO 416-607-5167msmerdon@capstoneinfrastructure.com
Capstone Infrastructure (TSX:CSE.PR.A)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Capstone Infrastructure (TSX:CSE.PR.A)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024