FuelCell Energy, Inc. has confirmed that it has signed an agreement to acquire the existing Bridgeport fuel cell park in Connecticut from Dominion Energy. FuelCell Energy had apparently developed, constructed and commissioned the 14.9 MW capacity Bridgeport fuel cell park in December 2013.
According to records, FuelCell Energy has operated and maintained the plant since its commissioning, under a service agreement with Dominion Energy. FuelCell Energy is looking to own and operate the park as part of its generation portfolio.
The company expects to add more than $15 million in revenues per year from this deal, as well as generate EBITDA margins in excess of 50 percent. As per the agreement, FuelCell will acquire 100 percent of the equity interest in the asset’s owner, Dominion Bridgeport Fuel Cell, LLC. This agreement has resulted from a competitive bid process conducted by its parent company, Dominion Energy.
For FuelCell Energy, purchasing the Bridgeport fuel cell plant is strategically important, stated Chip Bottone, Chief Executive Officer and President of FuelCell Energy. Having operated the plant for the last five years, the company is uniquely positioned to buy and benefit from this project, he added.
Sources with knowledge of the matter confirmed that a total cash consideration of $36.6 million will be paid to Dominion Energy. FuelCell would look to fund the acquisition with a combination of third party finance and $15 million in restricted cash on hand, which is tied with the project and will be released at closing.
A term lender and the Connecticut Green Bank are expected to be included for financing of the acquisition. Connecticut Green Bank had also participated in the initial funding of the construction of the Bridgeport project. The transaction is likely to be closed on or before 31 December 2018 and is subject to the customary closing conditions and contingencies, along with closing third party financing.