Innergex Enters into Definitive Agreement to be Acquired by CDPQ for $13.75 Per Share
Febraury 27, 2025
Innergex Renewable Energy Inc. and CDPQ announced they have entered into a definitive agreement dated as of February 24, 2025, pursuant to which CDPQ will acquire all of the issued and outstanding common shares of Innergex for a price of $13.75 per share in cash.
Pursuant to the Arrangement Agreement, CDPQ will also acquire all of the issued and outstanding preferred shares Series A and C of Innergex (the “Preferred Shares”) for $25.00 per share in cash (plus all accrued and unpaid dividends and, in the case of the Series A preferred shares, an amount in cash per Series A preferred share equal to the dividends that would have been payable in respect of such share until January 15, 2026, which is the next available redemption date) (the “Transaction”).
The Transaction is subject to approval by Innergex’s common shareholders and other customary closing conditions (including regulatory approvals).
“We are proud to support Innergex as it embarks on this new chapter, guided by a long-term vision, access to capital, and readiness to seize growth opportunities. This investment perfectly illustrates our constructive capital and dual mandate in action: while we strive for optimal returns, we are committed to supporting essential businesses headquartered in Québec, such as Innergex, which plays a key role in the energy transition and autonomy”, said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ. “Innergex has been a leader in renewable energy across North America, with strong development capabilities and a long history of collaboration and partnership with Indigenous communities.”
From now until the closing of the Transaction, CDPQ will seek to syndicate up to 20% of its invested capital to bring in like-minded investors who share its vision for the next chapter of Innergex’s growth. The Transaction is not conditional upon such syndication.
“Today’s announcement represents a pivotal moment for our company,” said Monique Mercier, Chair of the Special Committee and of the Board of Innergex. “After extensive work and careful deliberation, the Special Committee and the Board of Directors have unanimously concluded that the Transaction is in the best interests of Innergex and fair to its shareholders. We are pleased to be announcing a transaction which not only provides our shareholders with immediate liquidity at an attractive premium, but also positions Innergex for long-term success under the private ownership of CDPQ, an important Québec institution with a strong balance sheet and desire to continue developing renewable energy and maintaining deep relationships with the various communities and other stakeholders with which Innergex does business.”
“As we transition from being a publicly traded company to a privately held entity, this change marks an exciting new chapter in our journey,” said Michel Letellier, President and Chief Executive Officer of Innergex. “CDPQ shares our commitment to sustainability, growth as well as long-term value, hence together, we will be able to achieve even greater success. This move allows us to leverage their resources and expertise, while continuing to operate from our Longueuil headquarters, which will remain central to our global operations. This is great news for everyone involved, as it provides the stability and flexibility to pursue our goals without the distractions of market volatility. Our core mission to build a better world with renewable energy remains unchanged, including our shared prosperity approach with Indigenous and local communities. The strength of our team and values will continue to drive us forward. We are excited for the future as we continue to grow and innovate.”
Transaction Highlights
- Attractive premium for common shareholders: Consideration of $13.75 per issued and outstanding Common Share, payable entirely in cash, representing a premium of approximately 58% to the closing price of the Common Shares on the Toronto Stock Exchange (“TSX”) on February 24, 2025 of $8.71 per Common Share and approximately 80% to the 30-day volume weighted average share price on the TSX for the period ending on February 24, 2025 of $7.66 per Common Share;
- Premium for preferred shareholders: Holders of preferred shares will receive repayment in full of their subscription price of $25.00 per share, representing a premium to the 30-day volume weighted average share price on the TSX for the period ending on February 24, 2025 of approximately 24% in the case of Series C preferred shares and 58% in the case of Series A preferred shares, in addition to the payment of accrued and unpaid dividends (running until January 15, 2026 in the case of Series A preferred shares to take into account the fact that such shares are not redeemable prior to such date);
- Certainty of value and immediate liquidity: The shareholders of Innergex will receive their consideration entirely in cash, which provides certainty of value and immediate liquidity;
- Unanimous Innergex Board recommendation: The board of directors of Innergex (the “Board of Directors”) unanimously recommends that Innergex’s common shareholders (other than CDPQ and the Rollover Shareholders) and Series A preferred shareholders vote in favour of the Transaction;
- Long-term investor: CDPQ has a long-standing relationship with Innergex, with its first investments dating back to 1995. Over the years, CDPQ has made multiple investments and is now Innergex’s second-largest shareholder after Hydro-Québec. This deep understanding of Innergex’s potential and its strong development capabilities led CDPQ to believe that Innergex would be better suited under this new ownership, benefiting from access to capital to unlock its full potential, making this a strategic decision for the Corporation;
- Strategic alignment going forward: CDPQ is closely aligned with Innergex’s management in a shared vision for the future of Innergex and will leverage the expertise of Innergex’s existing management team led by two 20+-year tenure executives, Michel Letellier, President and Chief Executive Officer and Jean Trudel, Chief Financial Officer, to continue to support Innergex’s growth strategy and to build a global leader headquartered in Québec;
- Transaction has the support of Innergex’s largest shareholder and Innergex’s directors and executive officers: Hydro-Québec, Innergex’s largest shareholder with approximately 19.9% of the outstanding Common Shares, and each of the directors who are shareholders and certain executive officers of Innergex (collectively, the “Supporting Shareholders”) have entered into support and voting agreements pursuant to which they have all agreed to, among other things, vote all of the shares they own in favour of the Transaction. In addition, Innergex’s President and Chief Executive Officer and Chief Financial Officer have undertaken to roll a portion of their Common Shares and reinvest in the privatized Innergex an amount of not less than $15 million in the aggregate (on the basis of an amount per share equal to the per share consideration received by Innergex’s common shareholders under the Transaction), and other members of management and key employees will be invited to proceed similarly; and
Value supported by several fairness opinions: BMO Capital Markets (“BMO”), CIBC Capital Markets (“CIBC”) and Greenhill & Co. Canada Ltd., a Mizuho affiliate (“Greenhill”) have all provided the Board of Directors and the Special Committee with verbal opinions stating that, as at February 24, 2025, subject to the assumptions, limitations and qualifications set out in their respective opinions, the consideration to be received by the common shareholders of Innergex (other than CDPQ and the Rollover Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such shareholders. Greenhill also provided a fairness opinion to the Special Committee and at its direction to the Board of Directors stating that, as at February 24, 2025, subject to the assumptions, limitations and qualifications set out in such opinion, the consideration to be received by the Series A preferred shareholders pursuant to the Transaction is fair, from a financial point of view, to such shareholders.
