Ormat acquires U.S. Geothermal Inc. and its assets in California, Nevada and Guatemala

In a release today, U.S. Geothermal Inc. announced that it has entered into a definitive merger agreement under which a wholly owned subsidiary of Ormat Technologies, Inc. (“Ormat”) (NYSE:ORA) will acquire the Company for $5.45 per share in an all cash transaction.

The agreement, which has been unanimously approved by both companies’ Boards of Directors, represents a premium of approximately 28.5% to the prior day closing stock price on January 23, 2018. This represents roughly a company value of $110 million.

“We are proud that Ormat, the industry leader in geothermal development, recognized our company’s value and have confidence in their ability to successfully develop the US Geothermal asset base,” said Doug Glaspey, CEO of US Geothermal. “This transaction provides compelling value to our shareholders and is a testament to the hard work and efforts of our talented team members.” Doug Glaspey, a Founder and Chief Executive Officer of US Geothermal

Statement by Ormat

Isaac Angel, CEO of Ormat Technologies said “This acquisition significantly broadens and diversifies our operations in the United States, expanding our presence into Idaho and Oregon and giving us additional opportunities as we evaluate U.S. Geothermal’s development pipeline. We are confident we can leverage our unique core capabilities to improve generation and efficiency at the existing plants, utilizing our expertise and proprietary technology. Finally, we have identified operational and financial synergies, efficiencies and cost reductions, based on US Geothermal’s current revenue level, enabling us to improve the profitability of these operations. With this transaction, we demonstrate again the implementation of our business strategy to grow our business with accretive M&A transactions and organic growth, underscoring our commitment to creating sustainable value for our shareholders.”

Transaction Details

The transaction is not subject to a financing condition and is expected to close during the second quarter of 2018, subject to the approval of US Geothermal shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

Certain funds advised by JCP Investment Management, LLC, which own approximately 15.0% of the outstanding shares of US Geothermal, as well as the directors and officers of US Geothermal have entered into an agreement to vote in favor of the transaction.

ROTH Capital Partners, LLC acted as financial advisor and Dorsey & Whitney, LLP acted as legal counsel to US Geothermal.

About U.S. Geothermal Inc.

U.S. Geothermal Inc. is a leading and profitable renewable energy company focused on the development, production and sale of electricity from geothermal energy. The Company is currently operating geothermal power projects at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho for a total designed net output of approximately 45 MWs. The Company is also developing projects at: the Geysers, California; a second phase project at San Emidio, Nevada; at Crescent Valley, Nevada; and the El Ceibillo project located near Guatemala City, Guatemala.

Source: Company release by email, Ormat release