CDPQ Acquires Innergex: A Major Move in Renewable Energy

Innergex: A Renewable Energy Pioneer 

Founded in 1990, Innergex Renewable Energy Inc. is a Canadian company specializing in the development, acquisition, ownership, and operation of renewable energy projects. Initially focused on small hydroelectric plants in Quebec, the company gradually expanded into wind and solar power, establishing a strong presence across Canada, the United States, France, and Latin America. Today, Innergex operates a diverse portfolio of 90 facilities, including hydroelectric plants, wind farms, solar farms, and battery storage systems, with a total installed capacity of over 4,600 MW. 

Innergex’s mission is to drive the transition to renewable energy by developing and operating sustainable power projects that reduce reliance on fossil fuels. The company prioritizes long-term environmental responsibility while ensuring energy production that is both reliable and economically viable. With a strong focus on innovation, Innergex invests in technologies that optimize energy efficiency and storage, reinforcing its role as a key player in the global shift toward clean energy. By maintaining strong partnerships with local communities and governments, the company also works to create lasting economic benefits and social acceptance for its renewable projects. 

Over the years, Innergex has pursued an ambitious expansion strategy through acquisitions. In 2018, the company acquired Alterra Power Corporation, significantly increasing its hydro, wind, and solar assets and making it one of the largest independent renewable energy producers in Canada. In 2022, Innergex completed the acquisition of Aela Energía, the largest independent wind energy producer in Chile, adding 332 MW to its portfolio. The same year, it also took full ownership of 16 wind farms in France, strengthening its position in the European market. These strategic acquisitions have allowed Innergex to scale its operations, diversify its revenue streams, and reinforce its commitment to clean energy worldwide. 

CDPQ’s Vision for Sustainable Investments 

The Caisse de dépôt et placement du Québec (CDPQ) is one of Canada’s largest institutional investors, managing over $450 billion in assets. With a dual mandate to generate long-term returns while contributing to Québec’s economic development, CDPQ actively invests across asset classes, including private equity, infrastructure, fixed income, and real estate. In recent years, it has reinforced its commitment to sustainable investing, particularly in renewable energy. 

The acquisition of Innergex Renewable Energy aligns with CDPQ’s broader strategy of expanding its footprint in energy transition investments. CDPQ has been a major shareholder in Innergex for years, holding a 19.9% stake before the buyout offer. The move to take the company private reflects a long-term conviction in renewable infrastructure, allowing for greater flexibility in capital deployment without public market pressures. 

This acquisition is not an isolated event. CDPQ has been actively increasing its exposure to clean energy infrastructure, with past investments in Invenergy (USA), Azure Power (India), and Shizen Energy (Japan). These deals demonstrate a clear pattern: CDPQ seeks scale, operational influence, and stable long-term cash flows in the renewable sector. 

With Innergex under its full control, CDPQ can optimize capital allocation, accelerate growth initiatives, and position the company to capitalize on global trends in decarbonization. The transaction also signals CDPQ’s continued role as a strategic player in shaping the future of sustainable infrastructure, reinforcing its standing as a global leader in ESG-driven investments. 

The Buyout: Key Transaction Details and Market Reactions 

On the morning of February 25th, Innergex’s stock price jumped as it entered into an agreement with CDPQ to be taken private for 13.75$ per share, a staggering 58% premium to the previous close of 8.71$ and an 80% premium to the 30-day moving average of 7.66$. The transaction sets a $2.8B valuation to the equity value and represents a $10B enterprise value. The transaction includes the repayment of all outstanding preferred shares for 25$ each and corporate level debt. TD Securities was sole bookrunner and underwriter in providing senior bank financing to CDPQ for a total amount of $1.2B. 

Although the offer price was more than 50% above the current stock price, it fell short of Management’s target of 16$ per share according to Rupert Merer, equity research analyst at National Bank Financial. In the renewable highs of 2021, Innergex’s stock price soared up to 32$ at its peak, before nosediving for the next 4 years. Bidders will have a 65-day period to approach the company with a counteroffer, which analysts view as unlikely. 

As part of the deal, Hydro-Québec, the company’s main shareholder, will sell its 19.9% stake at a loss of 214$ million dollars, having initiated its position in February 2020, one Quebec institution’s loss is another institution’s win. CDPQ was already Innergex’s second largest shareholder having been invested for more than 2 decades, with now the opportunity to consolidate its position through a take private as have many other large private equity groups done in the past years.  

CDPQ and Innergex: A Long Term Bet on Clean Energy 

The acquisition of Innergex by CDPQ reflects a larger global shift, where institutional investors are increasingly prioritizing renewable energy assets. As governments worldwide set ambitious decarbonization targets, the demand for clean energy infrastructure is rising, making it a critical area for long-term investment. According to the International Energy Agency (IEA), renewable energy must account for nearly 90% of global electricity generation by 2050 to meet net-zero targets. This transition requires trillions of dollars in funding, creating significant opportunities for large-scale investors like CDPQ. 

Pension funds and sovereign wealth funds are particularly well-positioned to capitalize on this trend, as they seek stable, inflation-resistant returns in sectors with long-term growth potential. The volatility of public markets, coupled with increasing regulatory support for green initiatives, has made private investments in renewable energy more attractive. The deal also aligns with the broader movement of financial institutions reducing exposure to fossil fuels and reallocating capital toward sustainable infrastructure. As capital continues to flow into renewables, transactions like this signal a shift where green energy is no longer a niche sector. 

Investment Banking Team,