Pinnacle Lavington pellet plant (File photo/Vernon Matters Staff)

By Pete McIntyre

$831 million deal

Drax purchase of Pinnacle Renewable Energy approved by shareholders

Apr 13, 2021 | 12:59 PM

It’s now official.

The British-based energy company, Drax, has completed the acquisition of British Columbia-based Pinnacle Renewable Energy, which operates a plant in Lavington, among others.

The transaction was valued at C$831 million.

According to a news release from the Drax Group, the acquisition received overwhelming support from both sets of shareholders with 95.97 per cent of Pinnacle’s and 99.99 per cent of Drax’s shareholders voting in favour.

Drax operates the world’s largest sustainable power station fuelled by bioenergy in the U.K., while Pinnacle is a major producer and supplier of compressed wood pellets.

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Pinnacle will operate as a subsidiary of Drax and remain headquartered in British Columbia. Over 480 Pinnacle employees will join the Drax Group, including its existing leadership.

The enlarged Drax Group now owns or has an interest in 17 pellet plants and development projects across Canada and the Southern U.S. with the capacity to produce 4.9 million tonnes of bioenergy wood pellets annually from 2022, with access to four deep water port facilities and three major wood fibre baskets.

Will Gardiner, Chief Executive Officer of Drax, called it an exciting and important acquisition which positions Drax as the world’s leading sustainable bioenergy generation and supply business.

“I am delighted to welcome our new Pinnacle colleagues to the Drax family. Together we will help secure a zero carbon, lower cost, energy future by enhancing and growing sustainable bioenergy around the world,” Gardiner said.

Duncan Davies, Chief Executive Officer of Pinnacle said the transaction marks the beginning of an exciting new future for Pinnacle.

“Drax is a world-class organization with an ambitious vision for sustainable biomass and a willingness to invest in the business. As part of Drax, we will continue to build a positive, inclusive and safe workplace and support the communities in which we operate through our partnerships with First Nations and local businesses,” Davies remarked.