An affiliate of Northampton Capital Partners will acquire all of Altius Renewable Royalties’ (ARR) issued and outstanding common shares for a total consideration of approximately CA$162 million (US$120 million).

The transaction, made under an arrangement agreement, excludes the 58% of shares owned by ARR’s parent company Altius Minerals Corp., according to a Sept. 12 press release.

Under the agreement, ARR minority shareholders will receive cash consideration of CA$12 (US$8.83) for each ARR share held.

The consideration represents a 28% premium to the closing price on Sept. 4 of ARR shares on the Toronto Stock Exchange (TSX), the release stated. It also represents a 29% premium to the 20-day volume weighted average price of ARR shares on the TSX on Sept. 4.

The transaction is expected to close in fourth-quarter 2024.

Upon closing, ARR expects to be delisted from the TSX and cease to be a reporting issuer.

ARR will be held by Northampton (43%) and indirectly held by Altius Minerals (57%).

The decision to re-privatize ARR is largely a result of several years of “declining valuations” in North America’s renewable energy sector, according to David Bronicheski, chair of the special committee, which oversaw the transaction.

Bronicheski said the committee concluded that limited availability and higher implied costs of public equity capital would not support ARR’s expected investment opportunities and shareholder value accretion.

“We believe that Northampton, including its institutional investor base, provides the company with a partner that matches well with our anticipated opportunity set, while also providing our minority shareholders with an attractive premium and liquidity,” Bronicheski said.

National Bank Financial Inc. is acting as the independent valuator and financial adviser to the special committee in connection with the transaction.

McCarthy Tétrault LLP and Pierce Atwood LLP are acting as counsel to ARR. Kirkland & Ellis LLP and Mintz LLP are acting as counsel to Northampton.

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