ORIX Corporation completed the acquisition of 22.1% stake in Ormat Technologies, Inc. from a group of sellers.
July 25, 2017
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ORIX Corporation (TSE:8591) signed a stock purchase agreement to acquire 22.1% stake in Ormat Technologies, Inc. (NYSE:ORA) from a group of sellers for approximately $630 million on May 4, 2017. As part of agreement, ORIX will acquire 10.9 million of shares of Ormat at a price of $57 each. The sellers in the deal are Bronicki Investment Ltd., FIMI ENRG, L.P, FIMI ENRG Limited Partnership, Isaac Angel, Gillon Beck, Ami Boehm and Doron Blachar. The transaction will be funded by ORIX with available corporate funds. In connection with the transaction, ORIX and Ormat will also sign related agreement like commercial cooperation agreement, wherein Ormat and its affiliates will have an exclusive right of first refusal to own, invest in, develop and operate new geothermal business opportunities outside the State of Japan that are sourced by or presented to ORIX or its affiliates after the effective date, registration rights agreement, wherein ORIX may, at any time, request that Ormat file a registration statement with the Securities and Exchange Commission in order to permit a public offering and sale of Ormat's securities held by ORIX and governance agreement which sets forth the rights and obligations of the Ormat and ORIX with respect to certain corporate governance matters of Ormat. As part of transaction and pursuant to the governance agreement, Ormat is required, to appoint the three directors designated by ORIX to the Ormat's Board to fill the vacancies created by the resignation of three of its current directors from the Board and increase the size of the Board to nine directors and appoint the independent designee as a director to the Board.
The transaction is subject to regulatory approvals, approval under the HSR Act, resignation of the target's directors, execution of the registration rights and other customary closing conditions. Also, as a part of transaction, a special committee of the Ormat Board of Directors has been formed and the transaction and related agreements has unanimous been approved by the Special Committee and Ormat's Board of Directors. As of June 2, 2017, the deal was granted early termination under the HSR Act. The transaction is expected to close in the third quarter of 2017.
William H. Aaronson, Arthi Sridharan, Andrew Ditchfield and Jeffrey P. Crandall of Davis Polk & Wardwell LLP acted as legal advisors for special committee of the Ormat Board of Directors. Noam Ayali and Charles E. Hord of Chadbourne & Parke, L.L.P. acted as legal advisors for Ormat and Thomas W. Christopher and Joshua G. Kiernan of Latham & Watkins LLP acted as legal advisors for Orix. Sharon Amir, Tal Eliasaf and Daniella Ben-Shalom of Naschitz, Brandes, Amir & Co. acted as the legal advisors to FIMI ENRG, L.P or FIMI ENRG, Limited Partnership, Isaac Angel and Doron Blachar. Rona Bergman Naveh of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. acted as legal advisor to Bronicki Investments. Jefferies LLC acted as financial advisor for FIMI ENRG, L.P and FIMI ENRG, Limited Partnership in the transaction. Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as financial advisor for ORIX Corporation. Richard Grossman, Phyllis Korff and Yossi Vebman of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors for FIMI ENRG, L.P.
ORIX Corporation (TSE:8591) completed the acquisition of 22.1% stake in Ormat Technologies, Inc. (NYSE:ORA) from a group of sellers on July 26, 2017. As of July 26, 2017, the commercial cooperation agreement entered into by Ormat and ORIX was declared effective. The number of directors serving on Ormat's Board of Directors will increase to nine. Also, upon the recommendation of the Nominating and Corporate Governance Committee of the Board of Directors, the Board of Directors appointed Byron Wong as the Director. The Board of Directors has determined that Byron Wong is independent in accordance with the New York Stock Exchange listing standards and the rules and regulations of the Securities and Exchange Commission. Yuichi Nishigori, Stan Koyanagi and Todd Freeland have also been appointed to the Board of Directors and Todd Freeland has been appointed as the new Chairman of the Board of Directors.
Ormat Technologies, Inc. is a geothermal company that is engaged in geothermal and recovered energy generation (REG). The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter, a power generation unit that converts low, medium and high-temperature heat into electricity. It owns or has installed for utilities and developers worldwide, totaling approximately 3,200 megawatts (MW) of gross capacity. Its segments include Electricity Segment, Product Segment and Energy Storage Segment. Electricity segment develops, builds, owns, and operates geothermal and solar Photovoltaic (PV). Product segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation. Energy Storage segment owns and operates a grid connected In Front of the Meter (IFM) Battery Energy Storage System (BESS) facilities. Its portfolio includes 1,385 MW with 1,215 MW geothermal and solar generation.