Electric Services Company ALLETE Going Green And Private: Details

Zinger Key Points
  • ALLETE to be acquired by CPP Investments and GIP for $6.2 billion, $67.00 per share in cash.
  • Acquisition aims to support ALLETE's clean-energy leadership, providing access to capital for continued decarbonization efforts.

ALLETE, Inc. ALE inked a deal to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners for $6.2 billion, including the assumption of debt.

As per the terms, CPP Investments and GIP will acquire ALLETE for $67.00 per share in cash, representing an premium of around 19.1% to ALLETE’s closing share price on December 4, 2023, the date prior to a media article reporting that ALLETE was exploring a sale. The consideration also represents a 22.1% premium to the 30-day volume weighted average share price prior to that date.

The acquisition, which was unanimously approved by the Board of Directors, is expected to close in mid-2025, subject to customary closing conditions. 

Post deal-completion, ALLETE’s shares will no longer trade on the New York Stock Exchange, and will become a private company.

“Our ‘Sustainability-in-Action’ strategy has secured ALLETE’s place as a clean-energy leader. Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values,” said ALLETE Chair, President, and Chief Executive Officer Bethany Owen.

Bayo Ogunlesi, GIP’s Chairman and Chief Executive Officer said, “GIP, alongside CPP Investments, look forward to partnering to provide ALLETE with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve. Bringing together ALLETE, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

In Februrary, ALLETE reported fourth-quarter FY23 EPS of $0.89 missing the consensus of $0.97 and sales of $402.70 million missed the estimate of $425.30 million.

Investors can gain exposure to the stock via VictoryShares US Small Cap High Div Volatility Wtd ETF CSB and Affinity World Leaders Equity ETF Hypatia Women CEO ETF WCEO.

Price Action: ALE shares are down 1.27% at $63.46 at the last check Monday.

Image sourced from Shutterstock

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