Capstone Infrastructure Corporation and Renewable Energy Developers Inc.(ReD) have agreed that Capstone will acquire all the outstanding shares of ReD by way of a share exchange.

The result will be a larger infrastructure company with power generation facilities across Canada totalling approximately net 465 megawattsof installed capacity, an attractive pipeline of contracted development opportunities in Canada representing net 79 MW of capacity, and international investments in regulated water and district heating businesses.

The Board of Directors of each company has unanimously approved the Transaction.

Upon completion of the Transaction, which is valued at approximately $70 million, existing Capstone shareholders and ReD shareholders will own approximately 80% and approximately 20% of the common shares of the combined company, respectively.

The Transaction is subject to different approvals.

Under the Agreement, ReD has agreed to a non-solicitation restriction and a right for Capstone to match any superior proposals. ReD and Capstone have each agreed to pay a break fee of $4 million in certain circumstances.

Certain members of management, directors and key shareholders of ReD and Capstone have entered into voting support agreements under which they have agreed, among other things, to vote their common shares in favour of the Transaction.