This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Primary Energy Recycling Agrees To Buyout Minority Interest And Terminate Management Agreement

- Aggregate value of the transaction is approximately US$30 Million -

OAK BROOK, IL, Feb. 16, 2012 /PRNewswire/ - Primary Energy Recycling Corporation (TSX: PRI) (Primary Energy or the Company) today announced that it has entered into an agreement with Atlantic Power Corporation (TSX: ATP, NYSE: AT) (Atlantic Power) to purchase the 7,462,830.33 common membership interests in Primary Energy Recycling Holdings LLC (PERH) (14.3% of PERH total common membership interests) not currently held by the Company for approximately US$24 million plus a management agreement termination fee of approximately US$6.1 million for a total price of US$30.1 million, which is equivalent to C$4.021 per common share of the Company.

The agreed upon price for Atlantic Power's common membership interest in PERH, not including the management agreement termination fee, was established on December 19, 2011 and represented a 16% discount to the 60 day volume weighted average trading price of Primary Energy's common shares at that time.  The transaction remains subject to pricing adjustment or termination under certain circumstances. The transaction is expected to close in April, 2012.

"Completing this transaction has been a long standing goal of the Company," said John Prunkl, President and Chief Executive Officer of Primary Energy Recycling. "We believe the repurchase is an attractive use of capital.  Once this transaction closes, each shareholder of Primary Energy will have proportionally increased their share of the Company's facilities by 14.3%, and we will gain operational autonomy and flexibility that we believe will allow us to better execute our strategy going forward. With the successful renewal of two long-term customer agreements in 2011 and the expected termination of the management agreement, we are more optimistic than ever about our future."

On closing of the transaction, the management agreement, under which an indirect subsidiary of Atlantic Power provides certain operational and administrative services to the Company and its subsidiaries, will be terminated on payment of a termination fee as specified in the management agreement. If closing occurs as expected in April 2012, Primary Energy will be required to pay a US$6.1 million fee to terminate the management agreement. Primary Energy currently pays an approximate US$3.0 million annual fee, subject to annual escalation, under the management agreement, which will cease when the management agreement is terminated.  On a cash basis, the estimated cost to internalize the services provided by the Manager is in the range of this annual fee.

Primary Energy currently owns 85.7% of the common membership interests in PERH, and on completion of the transaction, will own 100% of PERH. The Company's total outstanding shares will remain unchanged at 44,706,186, as Primary Energy intends to finance the transaction through debt.  Completion of the transaction is conditional upon obtaining financing on terms acceptable to the Company.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs