This Day On The Street
Continue to site right-arrow
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

Primary Energy Recycling Closes Minority Interest Buyout And Terminates Management Agreement

OAK BROOK, IL, May 31, 2012 /PRNewswire/ - Primary Energy Recycling Corporation (TSX: PRI) (Primary Energy or the Company) today announced that it has closed its agreement with Atlantic Power Corporation (Atlantic Power) to purchase 7,462,830.33 (14.3%) common membership interests in Primary Energy Recycling Holdings LLC (PERH) not currently held by the Company.  The price paid was approximately US$24.2 million plus a management agreement termination fee of US$6.0 million. The total price is approximately US$30.2 million, which is equivalent to Cdn$4.17 per common share of the Company. Based upon yesterday's closing share price of Cdn$4.65, this purchase results in a discount of Cdn$0.48 per share or 10.4% for the acquired membership interest. 

"This transaction provides the Company with a clean, simple corporate structure, greater operational autonomy, and flexibility that will support the implementation of shareholder value-building initiatives going forward," said John Prunkl, President and Chief Executive Officer of Primary Energy Recycling. "We have executed a share repurchase of 14.3% of outstanding share equivalents, at what we believe to be an attractive price."

Prior to the closing of the transaction, Primary Energy paid approximately US$3.0 million annually, subject to annual escalation, under the management agreement.  On a cash basis, the estimated cost to internalize the services provided by the Manager is in the range of this annual fee.

As previously announced, the Company closed a US$110 million senior credit facility on May 24 th. Given the closing of the senior loan late in the calendar month, the parties agreed that an end of month closing would facilitate the easiest transition of management from the Manager to the Company.  The parties agreed to establish the price for Atlantic Power's common membership interest in PERH on May 18 th.  The purchase price, excluding the management termination fee, was initially set at US$24.0 million.  The increased trading price of the Company's shares since the announcement of this transaction results in a US$0.13 million purchase price increase per the terms of the agreement.

Primary Energy now owns 100% of the common membership interests in PERH, and the Company's total outstanding shares remain unchanged at 44,706,186.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs