Atlantic Power Corporation and Capital Power Income L.P. Announce Close of Acquisition of Capital Power Income L.P.

BOSTON, Nov. 7, 2011 /PRNewswire/ -- Atlantic Power Corporation (TSX: ATP) (NYSE: AT) ("Atlantic Power" or the "Company"), a leading power and infrastructure company, and Capital Power Income L.P. ("CPILP") today reported that Atlantic Power has completed its previously announced acquisition of CPILP pursuant to a court-approved plan of arrangement (the "Arrangement").  

"We could not be more pleased to bring our first corporate acquisition to close for our shareholders," said Barry Welch, President and CEO of Atlantic Power.  "Adding eighteen high quality projects, along with experienced operations personnel with a stellar operating and safety record to Atlantic Power's portfolio, provides a more diversified base of operations and steady, contracted cash flows that will support our dividend.  Our portfolio now has an average remaining PPA length of 9.1 years, our net generating capacity has increased 143% to 2,116 MW, and we now have approximately 300 employees throughout North America.  In addition, the acquisition strengthens our ability to execute our continued growth plans by providing an extended footprint into Canada, as well as a strengthened U.S. presence," said Mr. Welch.  

The acquisition of CPILP is expected to be accretive to cash flows.  Atlantic Power also announced today an increase in its dividend to Cdn$1.15/common share per annum, which became effective as of November 5, 2011.

"With the close of the Capital Power Income L.P. acquisition, we turn our attention to completing the integration of its assets and people into Atlantic Power," said Mr. Welch. "We have planned and executed detailed integration work plans over the last four months to ensure a smooth day one transition.  We also have a transition services agreement in place with Capital Power Corporation over the next 6 to 12 months in respect of certain services to facilitate ongoing integration, but we anticipate that our integration efforts thus far will minimize our reliance on transition services.  At the project level, we have had 100% retention of the operations personnel and plant managers, and we are building out our corporate level staff to enhance accounting, finance, tax, operations, commercial and legal support across the entire fleet of 30 generation facilities."

On Friday, November 4, 2011, Atlantic Power closed its previously announced private offering of US$460.0 million aggregate principal amount of senior notes due 2018 (the "Notes") with a coupon of 9.0%, at an issue price of  97.471% to fund a portion of the cash component of the purchase price for its direct and indirect acquisition of all limited partnership units of CPILP.

"While debt and equity capital markets were less than ideal, our marketing efforts in connection with the equity and debt offerings expanded Atlantic's base of institutional investors, while maintaining the strong support of our retail investors," said Mr. Welch. "In the months since announcing the CPILP deal, we have not taken our eyes off the acquisition and development market and we hope to take advantage of that broadened base of support to deliver additional accretive acquisitions to our shareholders."

Atlantic Power focuses on the North American market when considering acquisition opportunities, and is opportunistic with regards to fuel type and the geographical location of its targets.  Joint ventures with experienced renewables development companies, with a pipeline of projects in early construction or late-stage development, is one strategy that management uses for sourcing projects to grow Atlantic Power's asset base.    

Effect of Dividend Increase for Shareholders

For the month of November 2011, Atlantic Power intends to pay a dividend of Cdn$.0953 per common share to shareholders of record on the applicable record date, which represents a prorated dividend for the month of November calculated by applying the annual rate of Cdn$1.0944 per common share for the period from November 1 to November 4 and the annual rate of Cdn$1.15 per common share for the remainder of November.  For the month of December 2011, Atlantic intends to pay a dividend of Cdn$.0958 per common share to shareholders of record on the applicable record date based on the increase  to the Company's annual dividend to Cdn$1.15 per common share.

CPILP Unitholder Election Results

Pursuant to the Arrangement, Atlantic directly and indirectly acquired each outstanding limited partnership unit of CPILP in exchange for Cdn$19.40 in cash ("Cash Consideration") or 1.3 Atlantic Power common shares ("Share Consideration") in accordance with elections and deemed elections in accordance with the Arrangement.

As a result of the elections made by CPILP unitholders and pro-ration in accordance with the Arrangement, those unitholders who elected to receive Cash Consideration will receive in exchange for each limited partnership unit of CPILP (i) cash equal to approximately 73% of the Cash Consideration and (ii) Share Consideration in respect of the remaining approximately 27% of the consideration payable for the unit.  Any limited partnership units of CPILP not exchanged for cash consideration in accordance with the Arrangement have instead been exchanged for Share Consideration.  

Atlantic Power will provide or make available a tax information package to eligible unitholders that have indicated their intention to file a tax election in respect of the disposition of their units in accordance with the Arrangement.

Any questions or requests regarding consideration under the Arrangement may be directed to the depositary for the Arrangement, Computershare Investor Services Inc., at 1-800-564-6253 (toll-free in North America) or by e-mail at [email protected]. Former non-registered holders of limited partnership units of CPILP should contact their broker or other intermediary for details.

De-Listing of Limited Partnership Units of CPILP

De-listing of the limited partnership units of CPILP from the Toronto Stock Exchange is expected to occur or about November 9, 2011.  Atlantic Power common shares trade on the New York Stock Exchange and the Toronto Stock Exchange, under the symbols AT and ATP, respectively.

About Atlantic Power

Atlantic Power is a leading publicly traded, power generation and infrastructure company with a well diversified portfolio of assets in the United States and Canada. Our power generation projects sell electricity to utilities and other large commercial customers under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices.  The net generating capacity of the Company's projects is approximately 2,116 MW, consisting of interests in 30 operational power generation projects across 11 states and 2 provinces, one 53 MW biomass project under construction in Georgia, and an 84-mile, 500 kilovolt electric transmission line located in California. Atlantic Power also owns a majority interest in Rollcast Energy, a biomass power plant developer with several projects under development.  Atlantic Power is incorporated in British Columbia, headquartered in Boston and has offices in Chicago, Toronto, and Richmond, B.C.  

Our corporate strategy is to generate stable cash flows from our existing assets and to make accretive acquisitions to sustain our dividend payout to shareholders, which is currently paid monthly at an annual rate of Cdn$1.15 per share.  

Atlantic Power has a market capitalization of approximately $1.5 billion and trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:

Atlantic Power Corporation 
Amanda Wagemaker, Investor Relations
(617) 977-2700 
[email protected]

Copies of financial data and other publicly filed documents are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on the Company's website.

Cautionary Note Regarding Forward-looking Statements  

To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended and under Canadian securities law (collectively, "forward-looking statements"). Certain statements in this news release may constitute "forward-looking statements", which reflect the expectations of management regarding, among other things,  the expected benefits of the Arrangement, such as accretion, the integration of CPILP, the payment of increased dividends, future growth, results of operations, performance and business prospects and opportunities of our Company and our projects.  These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "project," "continue," "believe," "intend," "anticipate," "expect" or similar expressions that are predictions of or indicate future events or trends and which do not relate solely to present or historical matters. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved.   Although the forward-looking statements contained in this news release are based upon what are believed to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material.  Important factors that could cause actual results to differ materially from these expectations include, among other things:

• the expectation that the acquisition of CPILP will be accretive to cash flows;
• the possibility that the anticipated benefits and synergies from the acquisition of CPILP cannot be fully realized or may take longer to realize than expected;
• the possibility that costs or difficulties related to the integration of Atlantic Power and CPILP operations will be greater than expected;
• the ability of the combined company to retain and hire key personnel and maintain relationships with customers, suppliers or other business partners;
• the impact of legislative, regulatory, competitive and technological changes;
• the risk that the credit ratings of the combined company may be different from what Atlantic Power expects;
• the amount of distributions expected to be received from our projects and our estimated net cash tax refunds;
• the expectation that the conditions of the Toronto Stock Exchange to de-list the limited partnership units of CPILP will be satisfied;
• no assurances can be made that the Company will pay dividends at the level contemplated in the future or at all;
• the other risk factors relating to us and the power industry, as detailed from time to time in our filings with the United States Securities and Exchange Commission ("SEC") and/or Canadian securities regulators and authorities,

and other risk and uncertainties affecting the Company, as detailed from time to time in Atlantic Power's filings with the SEC and/or Canadian securities regulators and authorities (including, without limitation, the factors discussed under "Risk Factors" in the Company's periodic reports from time to time and in the management proxy circular and joint proxy statement of Atlantic Power and CPILP dated September 28, 2011), and CPILP's filings on the SEDAR website at www.sedar.com). These forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances.  The financial outlook information contained in this news release is presented to provide readers with guidance on the cash distributions expected to be received by the Company and to give readers a better understanding of the Company's ability to pay its current level of distributions into the future.  Readers are cautioned that such information may not be appropriate for other purposes.

SOURCE Atlantic Power Corporation; Capital Power Income L.P.