Capital Power (CPX) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Hummel (PA) and Rolling Hills (OH) adds 2.2 GW, expanding U.S. fleet by 50% and establishing a significant presence in PJM, North America's largest and most liquid power market.

• Positions company as one of five North American gas-focused IPPs with over 10 GW of natural gas capacity, enhancing scale and market relevance.

• Diversifies portfolio so no single market exceeds 30% of net capacity, supporting North American expansion and reducing market-specific risks.

• Assets are strategically located with access to low-cost fuel, strong market fundamentals, and proximity to major data center clusters.

• Aligns with priorities for shareholder value creation and supports a 12%-14% total shareholder returns target.

Financial terms and conditions

• Total consideration is US$2.2 billion (approx. CAD 3.0 billion), funded by cash, new corporate debt, and a $500 million common equity offering (bought deal and private placement).

• Purchase price equates to about $1,000 per kW, roughly half the cost of new build capacity.

• Five-year average EV to EBITDA is approximately 7x, below prior acquisition multiples.

• Equity portion is fully funded; financing plan maintains investment grade credit rating and balance sheet flexibility.

• Transaction expected to close in Q3 2025, subject to regulatory approvals and closing conditions.

Synergies and expected cost savings

• Double-digit AFFO per share accretion expected, with 17%-19% accretion over five years (2026-2030).

• Opportunities for asset optimization, recontracting, and expansion at both facilities, including a planned 30 MW upgrade at Hummel and potential repowering at Rolling Hills.

• Plant scale at both facilities expected to drive O&M savings.

• Leverages operational expertise and trading platform to optimize asset performance and returns.

• Integration expected to drive long-term value for shareholders through commercial optimization.