Algonquin Acquires Drayton Valley Power Income Fund

In July 2001, Algonquin Acquisition Inc., a subsidiary of Algonquin Power Income Fund, completed a takeover bid for all outstanding units of Drayton Valley Power Income Fund. Drayton Valley owned one hydroelectric and three biomass-powered generating facilities. The transaction value was approximately $63 million, includingrepayment of debt. Algonquin retained the hydroelectric generating facility and a 50 per cent interest in one of the biomass-powered generating facilities, with Primary Canadian Funding Company acquiring an interest in the other generating facilities. Algonquin now has interests in more than 50 generating facilities.

Blake, Cassels & Graydon LLP acted for Algonquin, with a team comprised of Ken Pearce, Kim Harle and Les Wong (corporate and securities) and Leslie Morgan, Chris Van Loan and Peter Lee (tax). John Krukowski and Stefano Dicecco of KPMG LLP advised on tax matters relating to the restructuring. Larry Spirgel of Morrison & Foerster LLP provided US securities law advice. Bennett Jones LLP acted for Drayton Valley, with a team comprised of John Kousinioris, David Macaulay and Jon Truswell. Stikeman Elliott acted as Canadian counsel for Primary in both the acquisition and in the financing provided by Trust Company of the West mentioned below, with a team comprised of Leland Corbett and Jessica Green (corporate) and David Weekes (tax) in Calgary and Marie Garneau and Abas Kanu (corporate) in Toronto.

In the US, Primary was represented by Ufer & Spaniola, PC, with a team comprised of Tony Spaniola and Adam Frost. Trust Company of the West provided financing to Primary and was represented by O’Melveny & Myers LLP in the US, with a team comprised of Todd Triller and Mary Koh, and was represented by Blake, Cassels & Graydon LLP in Canada with a team comprised of Martin Fingerhut in Toronto and Warren Nishimura in Calgary. The manager of Drayton Valley was represented by David Rowand of Rowand Savich. Drayton Valley’s lender, Alberta Treasury Branches, was represented by Alan du Heaume of Bishop & McKenzie LLP.

Algonquin recently completed a bought deal by issuing $75 million of units, the net proceeds of which were used in part to finance the bid. BMO Nesbitt Burns led a syndicate of underwriters on the financing. Blake, Cassels & Graydon LLP acted for Algonquin, with a team comprised of Ken Pearce and Les Wong (securities) and Leslie Morgan and Peter Lee (tax. Cassels Brock & Blackwell LLP acted for the underwriters, with a team comprised of Norman Findlay, Chad Accursi (securities), Christopher B.Norton and Andrew Reback(tax).