Local plant acquired in deal with UK company

SELBY, United Kingdom — British energy company Drax has agreed to acquire Pinnacle Renewable Energy at a price of $11.30 per share, valuing Pinnacle at $385 million.

The acquisition brings together Drax, which owns the world’s largest sustainable biomass power station in the UK, with Pinnacle, one of the leading global producers of high-quality compressed wood pellets. This Canadian-UK combination is expected to be the world’s leading sustainable biomass supply and power generation business.

Drax already owns and operates wood pellet mills in the southern United States. Pinnacle has 11 sites, including the one in Demopolis that is being constructed adjacent to Two Rivers Lumber Company.

With the addition of Pinnacle’s sites, Drax will own a total of 17 pellet plants and development projects. This will give Drax the capacity to produce 4.9 million tons of biomass wood pellets annually beginning in 2022, with access to four deep water port facilities and three major wood fiber baskets.

Drax is the largest decarbonization project in Europe. It has converted the UK’s biggest coal-fired power station to use sustainable biomass, delivering carbon savings of more than 80 percent.

As the UK’s biggest single-site renewable electricity generator, Drax produces enough renewable electricity for four million homes. Drax’s world-leading sustainable biomass sourcing policy goes beyond UK and EU regulations and aims to drive up standards globally. It will use pellets produced at the Pinnacle facilities in its UK power station, ensuring it has a cost-effective supply.

Drax is committed to ensuring the safe, efficient and sustainable operation of the enlarged group’s activities and intends to invest in Pinnacle accordingly to deliver this outcome.

The acquisition is subject to Drax and Pinnacle shareholder approval as well as regulatory approvals and receipt of certain third-party consents. It has been unanimously recommended by the board of Pinnacle and has the full support of Pinnacle’s major shareholder, affiliates of ONCAP. Completion is expected to occur in the second or third quarter of 2021.