Ontario Teachers’ ups stake in BluEarth Renewables

The Canadian pension will acquire the outstanding shares from ARC Financial and minority shareholders, eight months after the company raised fresh equity.

The Ontario Teachers’ Pension Plan (OTPP) will buy the outstanding shares of BluEarth Renewables, a private independent renewable power producer, from a fund managed by energy-focused private equity firm Arc Financial and minority shareholders, the Toronto-based pension plan said in a statement.

BluEarth management and employees will maintain an ownership stake, OTPP said, without specifying the size of the stake nor the number of outstanding shares it would be acquiring. It also did not disclose financial terms. The Canadian pension declined comment.

OTPP, through its Private Capital Group, has been a lead investor in BluEarth since the company was founded in 2010. At the time, the pension said it would provide up to C$75 million (€54.4 million; $60.7 million) in equity capital. A report released by McKinsey & Company and Thomson Reuters in 2011 stated that OTPP and Arc Financial, through Arc Energy Fund 6, had invested C$160 million in the company.

Last November, BluEarth said it had raised a new round of equity totaling C$81 million from its major shareholders, OTPP and Arc, along with management and other investors. That brought the total of equity raised since its founding to over C$250 million.  

At the time, it also said it was on track to reach its target of C$1 billion of spinning assets by 2017.

“During our partnership with Arc, BluEarth established itself as a leader in the Canadian renewable power sector,” Jane Rowe, senior vice president of OTPP’s Private Capital Group said in the statement. “We are pleased to be moving forward with BluEarth to support the next phase of its growth.”

Headquartered in Calgary, BluEarth focuses on the acquisition, development, construction and operation of wind, hydro and solar projects. The company’s portfolio includes 18 projects across Canada totalling 174 net megawatts (MW). It also has a pipeline of earlier-stage development projects, according to the statement.

Concurrent with the closing of the transaction, expected by the end of July, BluEarth will also have a new chief executive at the helm. Chief operating officer Grant Arnold will succeed Kent Brown, the company’s co-founder and current president and chief executive, who will remain on the board, eventually transitioning to the role of executive advisor.

Founded in 1990 and based in Toronto, OTPP is an independent organisation that invests the pension fund’s assets and administers the defined benefit pensions of 311,000 active and retired teachers in Ontario. It is the largest single-profession pension plan in Canada with its net assets totaling C$154.5 billion as of December 31, 2014.

OTPP said it will continue to invest in renewable and alternative opportunities “that are consistent with the investment goal of earning returns to pay pensions and the need to consider environmental, social and governance (ESG) factors in investment decisions.”