The purchase of British Columbia’s largest wood pellet producer Pinnacle Renewable Energy Inc. by British energy company Drax has been completed, the company announced this week.
It said shareholders on both sides of the deal voted overwhelmingly in favour of the acquisition, priced at $831 million, when the intention of Drax to buy the company was first announced in February.
Drax owns the world’s largest biomass power station, located in the United Kingdom, and wood pellet mills in the southern United States.
The purchase of Pinnacle's 11 sites will increase that count to 17 pellet plants and development projects and boosts its annual wood-pellet production capacity to 4.9 million tonnes from 2.9 million tonnes. Drax will also gain a deep water terminal in Prince Rupert.
Pinnacle will operate as a subsidiary of Drax and remain headquartered in British Columbia. Over 480 Pinnacle employees are on Pinnacle's payroll.
“This transaction marks the beginning of an exciting new future for Pinnacle," Pinnacle CEO Duncan Davies said in a statement. "Drax is a world-class organization with an ambitious vision for sustainable biomass and a willingness to invest in the business.
Drax CEO Will Gardiner said that, with the purchase, Drax becomes the world’s leading sustainable bioenergy generation and supply company, operating across North America, the UK, Europe and Asia.
Pinnacle owns 100% of pellet plants in Williams Lake, Burns Lake, Meadowbank (south of Hixon, Alberta), as well as in Armstrong in the Okanagan and Entwistle, Alta. It holds 70% ownership of a plant in Smithers and 30% of one in Houston, B.C., as well as 75% of one in Lavington in B.C.’s Okanagan, 70% of operations in Aliceville and Demopolis, Alabama, and 50% of one in High Level, Alberta.