Emera Sells 8.6 Million Shares to Fuel Future Growth

Megabucks for megawatts.

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The Motley Fool

By: Cameron Conway

The stock offering

Last week Emera (TSX:EMA) completed its previously announced bought deal offering. The company raised about $250 million by issuing 8,660,000 common shares priced at $28.85.

The funds are set to be used “for general corporate purposes to support the Company’s recently announced growth initiatives and to reduce indebtedness outstanding under Emera’s credit facility.” Emera has been active on the corporate expansion front – a trend that may be set to continue given this capital injection.

Current subsidiaries

While most people probably don’t recognize the name Emera, Eastern Canadians and New Englanders would recognize one of their many subsidiaries including:

Canada

Nova Scotia Power Inc.                      Algonquin Power & Utilities Corp

Emera Newfoundland                        Emera Brunswick Pipeline Company Limited

Emera New Brunswick                       Atlantic Hydrogen Inc.

Maritimes & Northeast Pipeline          OpenHydro

Bayside Power                                    Brooklyn Power (Nova Scotia not NY)

Northeast Wind Partners (aka First Wind)

US

Rumford Power (new)                                    Emera Maine,

Tiverton Power (new)                         Maine Public Service Company

Bridgeport Energy (new)                    Bangor Hydro Electric Company

Caribbean

Grand Bahama Power Company

Light & Power Holdings Ltd.

Growth through acquisitions

This company has made a recent push into the U.S. Just a couple of months ago Emera purchased three “combined cycle natural gas fired electricity generating facilities” in New England from Capital Power Corporation (TSX:CPX).

At a cost of US$541 million, these three facilities have the ability to produce a combined 1,050 MW of power. The facilities are located in Bridgeport, Connecticut (520 MW), Tiverton, Rhode   Island (265 MW), and Rumford Maine (265 MW).

This is the first foray into natural gas power in the U.S. for Emera and could be a signpost of their future plans to expand down the eastern seaboard. This move fulfills a long awaited goal for the company according to Chris Huskilson, (President & CEO) of Emera, “Adding gas generation to our existing portfolio in New England has been a strategic objective for Emera.”

Maritime link project

Despite this U.S. expansion, Emera has not forgotten about its homeland. Back in November they received approval from the Nova Scotia Utility and Review Board for a $1.5 billion project that will create a 520km long, 500MW transmission line linking Nova Scotia and Newfoundland/Labrador.

Flip the switch and give me a conclusion

With growth in the U.S., capital upgrades in Atlantic Canada and a seemingly semi-annual appetite for acquisitions, Emera is positioning itself to be a contending force in the eastern energy market. Plus a healthy quarterly dividend of $0.3625 is a nice touch as well.

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own shares in any of the companies mentioned.  The Motley Fool does not own shares in any of the companies mentioned.

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