Hydro One IPO

The long anticipated Hydro One IPO is coming to market and we wanted to take a preliminary look at the company as well as what the valuation will look like.

The Details:

Offering size: 81,100,000 common shares sold by the Province of Ontario. 89,250,000 with over-allotment or 15% of total shares.

Offer price: $19 - $21

Market-cap at IPO: $1.54 - $1.87 BLN

Use of proceeds: None, proceeds go directly to the provincial government.

Dividend Strategy: Plans to pay a dividend with a payout ratio of 70% to 80%, or $500 million annually. ~4% dividend initially.

The Company and Industry:

Hydro One is the largest electricity transmission and distribution company in Ontario. Hydro One essentially owns and operates Ontario’s entire transmission network and is the largest distributor of electricity in Ontario by number of customers at 1.2 million vs the next largest distributor that holds 744,000 customers. 

Read the full article on Hydro One over at Globe Investor.