U.S. Geothermal entered into a definitive merger agreement under which a unit of geothermal company Ormat Technologies will acquire the company for $5.45 per share in an all cash transaction.
The agreement, which has been unanimously approved by both companies’ boards of directors, represents a premium of about 28.5 percent to the prior day closing stock price on January 23, 2018.
“We are proud that Ormat, the industry leader in geothermal development, recognized our company’s value and have confidence in their ability to successfully develop the US Geothermal asset base,” said Doug Glaspey, CEO of US Geothermal. “This transaction provides compelling value to our shareholders and is a testament to the hard work and efforts of our talented team members.”
“US Geothermal has developed a high-quality portfolio of geothermal assets,” said Isaac Angel, CEO of Ormat Technologies. “As part of Ormat, we will leverage our core capabilities to help improve generation and enhance efficiency of these assets while also working to advance expansion opportunities. With this transaction, we demonstrate again the implementation of our business strategy to grow our business with accretive M&A transactions.”
The transaction is not subject to a financing condition and is expected to close during the second quarter of 2018, subject to the approval of US Geothermal shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Certain funds advised by JCP Investment Management, LLC, which own about 15 percent of the outstanding shares of US Geothermal, as well as the directors and officers of US Geothermal have entered into an agreement to vote in favor of the transaction.
ROTH Capital Partners, LLC acted as financial advisor and Dorsey & Whitney, LLP acted as legal counsel to US Geothermal.
U.S. Geothermal Inc. is renewable energy company focused on the development, production and sale of electricity from geothermal energy. The company is currently operating geothermal power projects at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho for a total designed net output of approximately 45 MWs. The Company is also developing projects at: the Geysers, California; a second phase project at San Emidio, Nevada; at Crescent Valley, Nevada; and the El Ceibillo project located near Guatemala City, Guatemala.