British energy company Drax has agreed to acquire Pinnacle Pinnacle Pellet for $831 million.
Drax owns the world’s largest sustainable biomass power station, located in the United Kingdom and wood pellet mills in the southern United States.
The purchase of Pinnacle's 11 sites will increase the count to 17 pellet plants and development projects. Drax will also gain a terminal in Prince Rupert.
Pinnacle is the second largest producer of industrial wood pellets in the world and has offices in Prince George and Richmond. It operates nine production facilities in Western Canada and one in Alabama, with one additional facility under construction in Alabama and more in development.
“Drax and Pinnacle share a common focus on delivering good quality low-cost biomass which we both believe is critical to global decarbonisation," Pinnacle CEO Duncan Davies said in a statement. "The combination will create a global leader in sustainable biomass with the vision, technical expertise and financial strength to help meet the growing demand for renewable energy products, which is exciting for our employees and customers.”
Shareholders are to receive $11.30 per share - a 13 per cent premium on the closing price as of Feb. 5. Drax will also take on Pinnacle's net debt of $356 million.
The transaction remains subject to shareholder and regulatory approval but is expected to be completed in the second or third quarter of 2021.
Editor's note: This story has been edited to include the correct purchase price. The Citizen regrets the error.