Global power company The AES Corporation (AES) announced that its subsidiary, AES Ballylumford Holdings Limited, acquired Premier Power Limited (PPL) for £102 million (approximately $160 million), which includes purchase price along with working capital adjustments.
Through the acquisition, AES Corporation will add 1,246 Megawatts (MW) of natural-gas fired power production from Ballylumford Power Station in County Antrim, Northern Ireland to its existing capacity in Northern Ireland. Following the acquisition, the total operating capacity of the company will increase to 1,868 MW or 15% of the Single Electricity Market, which covers Northern Ireland and the Republic of Ireland.
AES Corporation will utilize its existing cash balance to fund the Premier Power acquisition. The company has consistently maintained a high cash balance with the second-quarter 2010 ending at $2.9 billion versus $1.7 billion as of June 30, 2009. The company will also leverage its cash to acquire an ownership interest in 241 MW of small hydroelectric plants in China and repurchase shares.
The adjusted earnings of AES Corporation at the end of second-quarter 2010 were 23 cents per share, versus 28 cents at the end of second-quarter 2009. The Zacks Consensus Estimates for third-quarter 2010, fiscal year 2010 and fiscal year 2011 are 25 cents per share, 95 cents and $1.12, respectively.
We retain a short-term Zacks #3 Rank ('hold') on the stock.
Based in Arlington, Virginia, AES Corporation operates globally and is involved in generation, distribution, transmission, and sale of electricity to end-user customers in the residential, commercial, industrial, and governmental sectors.
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