Markham

PowerStream Merger Negotiations Continue

Tuesday, August 25, 2015

News Page

Merger Decision Expected October 2015

Opportunity for public to make deputations to General Committee and Council and to hear debate on the proposal

Markham - August 25, 2015 - On April 16, 2015, the Government of Ontario announced that negotiations were underway with respect to a potential three-way merger of PowerStream Holdings Inc., Enersource Corporation and Horizon Utilities Corporation, and an opportunity to acquire Hydro One Brampton Networks Inc. from the Province to create the second largest local distribution company in Ontario.

The three PowerStream shareholders, Markham, Vaughan and Barrie (and their holding companies) have partnered to evaluate the proposed merger transaction.

The City of Markham’s holding company is Markham Enterprises Corporation (MEC).  The City of Markham owns 100% of MEC, which in turn owns 34.2% of PowerStream Holdings Inc. shares.  MEC is governed by a Board of Directors, comprised of the 13 Markham Councillors.

Navigant Inc. and BDR North America have been retained to provide independent advice and financial due diligence, and Gowlings LLP has been retained to undertake legal due diligence and to support a decision on this important transaction.

The MEC Board has had several meetings over the spring and summer, and continues to meet, to consider financial and legal due diligence updates.

On May 26, 2015, a report was received at Markham’s General Committee on the proposed transaction, including the expected timelines, as well as the negotiation and decision-making process. This report was also received by Council on June 15, 2015.

Financial and legal due diligence on the proposed transaction are well underway. This is a very complex transaction, which requires careful consideration and analysis given the many variables, the inherent risks, and opportunities, the number of parties involved, and stakeholder interests.

PowerStream Merger Approval Timeline

September, 2015 (dates to be confirmed):

The City of Markham's holding company, Markham Enterprises Corporation (MEC), will receive and consider a recommendation from the PowerStream Board regarding the proposed merger with Enersource and Horizon and the purchase option for Hydro One Brampton. Navigant, BDR and Gowlings will provide their advice on the transaction, including appropriate conditions to be satisfied if it is to proceed.

MEC will render its decision on the proposed transaction in early September. MEC’s recommendation will be forwarded to its shareholder, the City of Markham, through General Committee, for consideration on a date to be confirmed, for a decision. There will be an opportunity for the public to make deputations and hear debate on the proposal.

General Committee’s recommendation will be considered by Council (date to be confirmed). If Council’s decision is to proceed with the proposed merger it will be subject to approval by the Ontario Energy Board. There will be an opportunity for the public to make deputations to Council and to hear debate on the proposal.

For more information:

Markham Mayor Frank Scarpitti: fscarpitti@markham.ca or 905-475-4872

Background

The proposed merger between Enersource Corporation, Horizon Utilities Corporation, PowerStream Inc and the purchase of Hydro One Brampton Inc. would serve as a catalyst for Local Distribution Company (LDC) consolidation, as recommended by the Premier’s Advisory Council on Government Assets.

Consolidation is expected to deliver efficiencies and economies of scale, while continuing to provide safe, reliable and clean electricity. It should also allow larger, more efficient new companies to use collective resources to deliver a positive impact on distribution rates, and innovative technologies for customers.

Unanimous shareholder approval for the transaction is required from PowerStream, Enersource and Horizon.

If the shareholders of all three local distribution companies approve the transaction, the Ontario Energy Board (OEB) will review the merger to ensure there is value for electricity consumers. If approved by the OEB, the merger would be finalized within approximately six months, by March 31, 2016.

About the Local Distribution Companies

PowerStream

PowerStream Holdings Inc. is a municipally owned energy company providing power and related services to more than 375,000 customers primarily residing or owning a business in communities located immediately north of Toronto and in Central Ontario. It is jointly owned by the Cities of Barrie, Markham and Vaughan through their respective holding companies, Barrie Hydro Holdings Inc., Markham Enterprises Corporation and Vaughan Holdings Inc.

Enersource

Enersource Corporation serves over 200,000 residential and commercial customers across Mississauga. It is a diversified energy and technologies company that serves customers through the distribution of electricity and the delivery of services related to the design, operation and maintenance of electrical systems. Ninety per cent of Enersource Corporation is owned by the City of Mississauga, and 10 percent is owned by BPC Energy Corporation (Borealis), which is part of the Ontario Municipal Employees Retirement System (OMERS).

Horizon Utilities

Horizon Utilities Corporation provides electricity and related utility services to over 240,000 customers in Hamilton and St. Catharines. Horizon Utilities is wholly owned by Horizon Holdings Inc., a company jointly owned by the cities of Hamilton and St. Catharines through their holding companies Hamilton Utilities Corporation and St. Catharines Hydro Inc.

Hydro One Brampton

Hydro One Brampton Networks Inc. was acquired by Hydro One from the City of Brampton in 2001. It has more than 150,000 residential, commercial and industrial customers and serves an area of 300 square kilometers. In order to meet the growth of the community and needs of its customers, Hydro One Brampton continues to work with the City of Brampton and other organizations to improve Brampton’s infrastructure and distribution system.

Merger Decision Expected October 2015

Opportunity for public to make deputations to General Committee and Council and to hear debate on the proposal

Markham - August 25, 2015 - On April 16, 2015, the Government of Ontario announced that negotiations were underway with respect to a potential three-way merger of PowerStream Holdings Inc., Enersource Corporation and Horizon Utilities Corporation, and an opportunity to acquire Hydro One Brampton Networks Inc. from the Province to create the second largest local distribution company in Ontario.

The three PowerStream shareholders, Markham, Vaughan and Barrie (and their holding companies) have partnered to evaluate the proposed merger transaction.

The City of Markham’s holding company is Markham Enterprises Corporation (MEC).  The City of Markham owns 100% of MEC, which in turn owns 34.2% of PowerStream Holdings Inc. shares.  MEC is governed by a Board of Directors, comprised of the 13 Markham Councillors.

Navigant Inc. and BDR North America have been retained to provide independent advice and financial due diligence, and Gowlings LLP has been retained to undertake legal due diligence and to support a decision on this important transaction.

The MEC Board has had several meetings over the spring and summer, and continues to meet, to consider financial and legal due diligence updates.

On May 26, 2015, a report was received at Markham’s General Committee on the proposed transaction, including the expected timelines, as well as the negotiation and decision-making process. This report was also received by Council on June 15, 2015.

Financial and legal due diligence on the proposed transaction are well underway. This is a very complex transaction, which requires careful consideration and analysis given the many variables, the inherent risks, and opportunities, the number of parties involved, and stakeholder interests.

PowerStream Merger Approval Timeline

September, 2015 (dates to be confirmed):

The City of Markham's holding company, Markham Enterprises Corporation (MEC), will receive and consider a recommendation from the PowerStream Board regarding the proposed merger with Enersource and Horizon and the purchase option for Hydro One Brampton. Navigant, BDR and Gowlings will provide their advice on the transaction, including appropriate conditions to be satisfied if it is to proceed.

MEC will render its decision on the proposed transaction in early September. MEC’s recommendation will be forwarded to its shareholder, the City of Markham, through General Committee, for consideration on a date to be confirmed, for a decision. There will be an opportunity for the public to make deputations and hear debate on the proposal.

General Committee’s recommendation will be considered by Council (date to be confirmed). If Council’s decision is to proceed with the proposed merger it will be subject to approval by the Ontario Energy Board. There will be an opportunity for the public to make deputations to Council and to hear debate on the proposal.

For more information:

Markham Mayor Frank Scarpitti: fscarpitti@markham.ca or 905-475-4872

Background

The proposed merger between Enersource Corporation, Horizon Utilities Corporation, PowerStream Inc and the purchase of Hydro One Brampton Inc. would serve as a catalyst for Local Distribution Company (LDC) consolidation, as recommended by the Premier’s Advisory Council on Government Assets.

Consolidation is expected to deliver efficiencies and economies of scale, while continuing to provide safe, reliable and clean electricity. It should also allow larger, more efficient new companies to use collective resources to deliver a positive impact on distribution rates, and innovative technologies for customers.

Unanimous shareholder approval for the transaction is required from PowerStream, Enersource and Horizon.

If the shareholders of all three local distribution companies approve the transaction, the Ontario Energy Board (OEB) will review the merger to ensure there is value for electricity consumers. If approved by the OEB, the merger would be finalized within approximately six months, by March 31, 2016.

About the Local Distribution Companies

PowerStream

PowerStream Holdings Inc. is a municipally owned energy company providing power and related services to more than 375,000 customers primarily residing or owning a business in communities located immediately north of Toronto and in Central Ontario. It is jointly owned by the Cities of Barrie, Markham and Vaughan through their respective holding companies, Barrie Hydro Holdings Inc., Markham Enterprises Corporation and Vaughan Holdings Inc.

Enersource

Enersource Corporation serves over 200,000 residential and commercial customers across Mississauga. It is a diversified energy and technologies company that serves customers through the distribution of electricity and the delivery of services related to the design, operation and maintenance of electrical systems. Ninety per cent of Enersource Corporation is owned by the City of Mississauga, and 10 percent is owned by BPC Energy Corporation (Borealis), which is part of the Ontario Municipal Employees Retirement System (OMERS).

Horizon Utilities

Horizon Utilities Corporation provides electricity and related utility services to over 240,000 customers in Hamilton and St. Catharines. Horizon Utilities is wholly owned by Horizon Holdings Inc., a company jointly owned by the cities of Hamilton and St. Catharines through their holding companies Hamilton Utilities Corporation and St. Catharines Hydro Inc.

Hydro One Brampton

Hydro One Brampton Networks Inc. was acquired by Hydro One from the City of Brampton in 2001. It has more than 150,000 residential, commercial and industrial customers and serves an area of 300 square kilometers. In order to meet the growth of the community and needs of its customers, Hydro One Brampton continues to work with the City of Brampton and other organizations to improve Brampton’s infrastructure and distribution system.