GIC acquires minority stake in U.S. transmission company

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GIC acquires minority stake in U.S. transmission company

Fortis has reached a definitive agreement with GIC Private Limited (GIC), Singapore’s sovereign wealth fund, to acquire a 19.9% equity interest in ITC Holdings Corp. for aggregate consideration of US$1.228 billion in cash upon the closing of the acquisition.

ITC owns and operates high-voltage transmission facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, serving a combined peak load exceeding 26,000 megawatts along approximately 15,700 circuit miles of transmission line. ITC's grid development focus includes growth through regulated infrastructure investment as well as domestic and international expansion through merchant and other commercial development opportunities.

This definitive agreement follows the announcement on February 9, 2016 that Fortis will acquire ITC in a transaction valued on announcement at approximately US$11.3 billion. With the definitive agreement for the sale of 19.9% of ITC to GIC, Fortis has completed a significant component of the ITC acquisition financing.

The financing of the ITC acquisition has been structured to allow Fortis to maintain an investment-grade credit rating and is consistent with maintaining Fortis' existing capital structure. Financing for the cash portion of the acquisition purchase price will be achieved primarily through this minority investment sale, as well as through the issuance of approximately US$2 billion of Fortis debt.

Upon closing of the acquisition, GIC will be granted certain customary minority rights in connection with its investment in ITC. The closing of the acquisition of ITC is expected to occur in late 2016, and is subject to ITC and Fortis shareholder approvals, certain regulatory and federal approvals and other customary closing conditions.

Scotiabank acted as exclusive financial advisor to Fortis in connection with the ITC minority investor process. Citigroup Global Markets Inc. acted as financial advisor to GIC on this transaction

Barry Perry, President and Chief Executive Officer of Fortis, stated:

“An important milestone in the acquisition of ITC has been accomplished. We are very pleased to be partnering with GIC in the future growth and development of ITC. GIC is astute and thoughtful, with a proven track record in North American infrastructure investing. They share our vision for ITC and we look forward to working together in this partnership.”

ITC Holdings Corp. President, CEO and Chairman of the Board, Joseph L. Welch, said: 

“GIC will be a great investment partner for Fortis as ITC builds on its success by continuing to take advantage of the growing opportunities for transmission investment in North America.”

Rhys Evenden, Head of Infrastructure for North America at GIC, commented:

"We believe this is an attractive opportunity to partner with Fortis to invest in ITC. Given the high quality transmission platform ITC offers, the strength of the Fortis management team, and GIC’s long-term approach to infrastructure investing, we look forward to a successful transaction and partnership.”

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