Mr. John Kousinioris reports

TRANSALTA TO ACQUIRE 310 MW CONTRACTED ONTARIO GAS PORTFOLIO FOR $95 MILLION

TransAlta Corp. has entered into a definitive share purchase agreement with an affiliate of Hut 8 Corp. and Macquarie Equipment Finance Ltd., the equity owners of Far North Power Corp., pursuant to which TransAlta will acquire Far North and its entire business operations in Ontario. Far North owns and operates generation assets consisting of four natural gas-fired generation facilities totalling 310 megawatts. The purchase price for the acquisition is $95-million, subject to working capital and other adjustments. The company will finance the transaction using cash on hand and draws on its credit facilities.

Highlights

• Purchase price of $95-million, or approximately $306 per kilowatt (kW);
• Immediately accretive to free cash flow and cash yield upon closing with approximately 68 per cent of the portfolio's gross margin contracted to 2031; attractive recontracting fundamentals longer term;
• TransAlta's energy marketing and trading team to deliver merchant upside and synergies;
• Augments and further diversifies TransAlta's contracted portfolio and enhances competitive position in the company's core market of Ontario, increasing its footprint by 310 megawatts (MW) to 1,300 MW.

"With this acquisition, our position in Ontario increases through contracted and complementary assets. As electrification and population growth continues, the market will meaningfully rely on existing firm, dispatchable generation for grid reliability. Beyond the contract period these assets are attractively positioned for recontracting opportunities as well as with optionality given the 167 acres of co-located land. The transaction adds to our reliable and increasingly diversified portfolio, and we see long-term value in these assets," said John Kousinioris, president and chief executive officer of TransAlta.

"This acquisition is immediately accretive to cash flow and demonstrates progress towards our priority of pursuing strategic M&A," said Joel Hunter, executive vice-president, finance and chief financial officer. "We expect to seamlessly integrate these assets while remaining focused on advancing our Alberta data centre and Centralia opportunities."

The assets are expected to add approximately $30-million of average adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) per year, from the 120 MW Iroquois Falls, 110 MW Kingston, 40 MW North Bay and 40 MW Kapuskasing facilities. The agreement is subject to customary closing conditions, including receipt of regulatory approvals. The transaction is expected to close by early first quarter of 2026.

About TransAlta Corp.

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada's largest producers of wind power and thermal power and Alberta's largest hydroelectric power. For over 114 years, TransAlta has been a responsible operator and a proud member of the communities where the company operates and where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Its reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 70-per-cent reduction in GHG (greenhouse gases) emissions or 22.7 million tonnes CO2e (carbon dioxide equivalent) since 2015 and received an upgraded MSCI ESG rating of AA.

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