Veresen Inc.

Veresen Inc.

February 21, 2017 08:00 ET

Veresen Announces Sale of Power Business for $1.18 Billion

CALGARY, ALBERTA--(Marketwired - Feb. 21, 2017) - Veresen Inc. ("Veresen") (TSX:VSN) is pleased to announce it has entered into a suite of separate agreements to sell its power generation business for $1.18 billion.

"The sale of our power business is an important milestone in the delivery of our long-term business strategy, and we are very pleased with the outcome," commented Don Althoff, President and CEO of Veresen. "The $1.4 billion of contracted capital projects in our core natural gas and NGL infrastructure business is now fully funded with no need to access the capital markets, ensuring that top line growth translates into per share metrics. Additionally, the divestiture strengthens our balance sheet, further underpinning our dividend and providing greater flexibility to fund the incremental growth projects we expect to secure over the next 12 to 18 months."

Veresen has maximized the value of its power business by selling the assets in three separate packages. The following table includes certain key metrics and aggregate implied transaction multiples for Veresen's power generation business:

Transaction Value $1.18 billion
Estimated Project Level Financing (December 31, 2016) $402 million
Estimated Full Year 2016 EBITDA $92 million
Implied EBITDA Multiple 12.8 x

Each of the agreements is subject to closing adjustments and conditions customary in transactions of this nature. Closing is expected to occur during the second quarter of 2017 subject to the receipt of all necessary approvals. Veresen anticipates the minimal amount of cash taxes arising from the sale of the power business will be recovered in the following year. The company expects to update its 2017 guidance for the divestiture of the power business upon the closing of the sale process. TD Securities Inc. acted as the company's sole financial advisor on this divestiture.

About Veresen Inc.

Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in the Alliance Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System; a midstream business which includes a partnership interest in Veresen Midstream Limited Partnership, which owns assets in western Canada, and an ownership interest in Aux Sable, which owns a world-class natural gas liquids (NGL) extraction facility near Chicago, and other natural gas and NGL processing energy infrastructure; and a power business comprised of a portfolio of assets in Canada. Veresen is also developing Jordan Cove LNG, a six million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated Pacific Connector Gas Pipeline. In the normal course of business, Veresen regularly evaluates and pursues acquisition and development opportunities.

Veresen's Common Shares, Cumulative Redeemable Preferred Shares, Series A, Cumulative Redeemable Preferred Shares, Series C, and Cumulative Redeemable Preferred Shares, Series E trade on the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A", "VSN.PR.C" and "VSN.PR.E", respectively. For further information, please visit

Forward-looking Information

Certain information contained herein relating to, but not limited to, Veresen and its businesses and the offering of the notes, constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the ability of Veresen to fund its existing and any incremental capital projects; the ability of Veresen to add incremental growth projects; the impact of the transactions on Veresen's financial results and ability to fund its dividends; the amount of EBITDA generated by Veresen's power business in 2016; the amount of project financing on Veresen's power business at December 31, 2016; the timing of closing of the announced transactions; the tax impacts arising from the sale of the power business and the timing of the release of updated 2017 guidance. Readers are also cautioned that such additional information is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

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