Gowling WLG is acting as counsel to PowerStream Inc. and, separately, its shareholders (the Ontario cities of Vaughan, Markham and Barrie) with respect to the $607-million purchase of Hydro One Brampton Networks Inc. by PowerStream, Enersource Corporation and Horizon Utilities Corporation.
On March 24, 2016, the Province of Ontario announced that it is proceeding with the merger of Hydro One Brampton Networks Inc. with PowerStream Inc., Enersource Corporation and Horizon Utilities Corporation, as announced in April 2015.
The municipal councils for the shareholder communities of Barrie, Markham and Vaughan (PowerStream), Mississauga (Enersource), and Hamilton and St. Catharines (Horizon), along with a representative for OMERS-owned Borealis (a shareholder of Enersource), have all voted to proceed with the merger.
The province has now executed a Share Purchase Agreement with PowerStream, Enersource and Horizon. The purchasers have agreed to pay $607 million for Hydro One Brampton. In turn, PowerStream, Enersource and Horizon, together with their shareholders, have entered into a Merger Participation Agreement under which they, and their wholly-owned local distribution companies, will amalgamate immediately before the acquisition of Hydro One Brampton.
The transaction will create the second-largest electricity distributor in Ontario, and represents a major step forward in promoting Local Distribution Company consolidation in Ontario, in line with the recommendations made in the 2012 Ontario Distribution Sector Review Panel Report. All net revenue gains from the sale will be dedicated to the Trillium Trust, funding investments in transit, transportation and other priority infrastructure.
The transaction and creation of the new company are subject to post-closing adjustments and regulatory approval from the Ontario Energy Board, anticipated to occur in late 2016.
Gowling WLG is acting for Powerstream, with a team consisting of Robert Hull, Edward Johnston and Neeta Sahadev and, separately, for the shareholders of PowerStream (the cities of Vaughan, Markham and Barrie), with a team consisting of Paul Harricks and Rob Blackstein. Paul Carenza provided tax advice to both PowerStream and its shareholders.