Atlantic Power Agrees To Be Acquired By I Squared Capital

The following excerpt is from the company's SEC filing.

Common
shareholders to receive US$3.03 per share in cash, representing a 48% premium to the
30-day volume weighted average price per common share on the NYSE

Convertible
debentures to be converted to common shares, including a make whole premium; following
conversion, debenture holders will receive US$3.03 per share in cash

Preferred
shareholders and medium term noteholders to receive cash representing meaningful premiums
to recent trading prices

DEDHAM, Mass., January 14, 2021 –
Atlantic Power Corporation (NYSE: AT) (TSX: ATP) (“Atlantic Power”), an independent power producer with operations
in eleven U.S. states and two Canadian provinces, today announced that it has entered into a definitive agreement with I Squared
Capital, a leading global infrastructure investor, under which the company’s outstanding common shares and convertible debentures,
and the outstanding preferred shares and medium term notes of certain of its subsidiaries, will be acquired. The total enterprise
value of the deal is approximately US$961 million (based on current foreign exchange rates) and the transaction was unanimously
approved by Atlantic Power’s board of directors.

“We are pleased to announce this
transaction with I Squared Capital. The independent directors of the Board, with the assistance of our financial and legal advisors,
carefully analyzed I Squared Capital’s offer, and after extensive negotiation and thorough consideration, concluded that
the agreement is in the best interests of Atlantic Power,” said Kevin T. Howell, Chairman of Atlantic Power’s Board
of Directors.

“The all-cash price of US$3.03 per
common share represents a significant premium to our recent
trading levels,” said James J. Moore, Jr., President and Chief Executive Officer of Atlantic Power. “As our fellow
shareholders know, the future value of our shares is highly dependent on power prices and re-contracting outcomes for several
major Power Purchase Agreements that are expiring in the next three to five years. The acquisition of our shares for cash would
remove this uncertainty for investors and provide immediate and significant cash value. We have carefully considered the offer
and we encourage our fellow shareholders to join management and the Board in voting to approve this transaction.”

“The agreement also provides for
the acquisition of our other public securities for cash, delivering a positive outcome for all of our security holders. Completion
of this transaction is conditioned upon the approval of these holders, as well as other required approvals, which are discussed
in this press release,” continued Mr. Moore. “I Squared Capital is a strong financial organization whose leaders have
significant experience in the power sector. Thomas Lefebvre and his team have been resilient and resourceful in putting together
this transaction, which we believe is an excellent opportunity for the security holders and employees of Atlantic Power.”

“We are excited to partner with
Jim Moore and the management team, who have made great progress over the past several years in improving the company’s balance
sheet and leverage ratio while addressing operational challenges,” stated Thomas Lefebvre, Partner at I Squared Capital.
“Atlantic Power has an attractive portfolio of assets that I Squared Capital is well positioned to manage and we look forward
to working together.”

Transaction Highlights

Common
shareholders of Atlantic Power will receive US$3.03 per common share in cash, representing
a 48% premium to the 30-day volume weighted average price per common share on the New
York Stock Exchange for the period ending January 14, 2021.

Atlantic
Power’s 6.00% Series E Convertible Unsecured Subordinated Debentures due January
31, 2025 will be converted into common shares of Atlantic Power immediately prior to
the closing of the transaction based on the conversion ratio in effect at such time (including
the “make whole premium shares” issuable under the terms of the trust indenture
for the convertible debentures following a cash change of control). Holders of the convertible
debentures will receive US$3.03 per common share held following the conversion of the
convertible debentures, plus accrued and unpaid interest on the convertible debentures
up to, but excluding, the closing date of the transaction.

Atlantic
Power Preferred Equity Ltd.’s (“APPEL”) cumulative redeemable preferred
shares, Series 1, cumulative rate reset preferred shares, Series 2, and cumulative floating
rate preferred shares, Series 3, will be redeemed for Cdn$22.00 per preferred share in
cash, representing meaningful premiums to the recent trading prices of such shares on
the Toronto Stock Exchange.

Atlantic
Power Limited Partnership’s (“APLP”) 5.95% medium term notes due June
23, 2036 will be redeemed for consideration equal to 106.071% of the principal amount
of medium term notes held as of the closing of the transaction, plus accrued and unpaid
interest on the medium term notes up to, but excluding, the closing date of the transaction.
Holders of medium term notes that deliver a written consent to the proposed amendments
to the trust indenture governing the medium term notes (as described below) will also
be entitled to a consent fee equal to 0.25% of the principal amount of medium term notes
held by such holders, conditional on closing of the transaction.

The acquisition of Atlantic
Power’s outstanding common shares and the redemption of the outstanding preferred shares of APPEL will be completed by way
of a plan of arrangement (the “Arrangement”) under the

Business Corporations Act

(British Columbia). In connection
with the Arrangement, Atlantic Power’s shareholder rights plan will be terminated and all rights to purchase Atlantic Power’s
common shares issued pursuant to the shareholder rights plan will be cancelled.

Recommendation of the Board and the
Special Committee

The board of directors of Atlantic Power
(the “Board”), after consultation with financial and legal advisors, and based on the unanimous recommendation of
a special committee of the Board (the “Special Committee”) comprised entirely of independent directors, has unanimously
approved the Arrangement and determined that the Arrangement is in the best interests of Atlantic Power, and recommends that Atlantic
Power’s common shareholders vote in favor of the Arrangement. The board of directors of APPEL has similarly unanimously
approved the Arrangement and determined that the Arrangement (together with a proposed continuance of APPEL under the laws of
British Columbia) is in the best interests of APPEL and recommends that the preferred shareholders of APPEL vote in favor of the
Arrangement and the proposed continuance.

The Board, after consultation with financial
and legal advisors, and based on the unanimous recommendation of the Special Committee, has also unanimously determined that the
mandatory conversion of Atlantic Power’s convertible debentures in accordance with the terms set out in the Arrangement
Agreement (the “Arrangement Agreement”) is in the best interests of Atlantic Power and recommends that holders of
the convertible debentures vote in favor of an amendment to the trust indenture governing the convertible debentures to provide
for their mandatory conversion on closing of the Arrangement into common shares of Atlantic Power based on the conversion ratio
in effect at such time under the terms of the trust indenture (including the “make whole premium shares” issuable
under the terms of the trust indenture following a cash change of control).

In addition, the board of directors of
the general partner of APLP, after consulting with financial and legal advisors, has unanimously determined that the mandatory
redemption of its 5.95% medium term notes due June 23, 2036 in accordance with the terms set out in the Arrangement Agreement
is in the best interests of APLP and recommends that holders of the medium term notes vote in favor of an amendment to the trust
indenture governing the medium term notes to provide for such mandatory redemption on closing of the Arrangement for consideration
equal to 106.071% of the principal amount of the medium term notes held plus accrued and unpaid interest thereon up to, but excluding,
the closing date of the transaction. Holders of medium term notes that deliver a written consent to the proposed amendments to
the trust indenture governing the medium term notes will also be entitled to a consent fee equal to 0.25% of the principal amount
of medium term notes held by such holders, conditional on closing of the transaction.

Blair Franklin Capital Partners Inc. has
provided the Special Committee and the Board, and the board of directors of APPEL, with its opinions that, as of the date of the
opinions, and subject to the factors, assumptions, limitations and qualifications on which such opinions are based, the consideration
to be paid to holders of Atlantic Power’s common shares and convertible debentures, and the preferred shares of APPEL (in
each case other than I Squared Capital and its affiliates), is fair, from a financial point of view, to such holders. Each of
the directors and executive officers of Atlantic Power has entered into a support agreement to vote their common shares and preferred
shares, if any, in support of the Arrangement, and to vote their convertible debentures and medium term notes, if any, in support
of the amendments to the trust indentures governing the convertible debentures and the medium term notes, as applicable.

The Arrangement Agreement

The Arrangement Agreement, entered into
with affiliates of infrastructure funds managed by I Squared Capital (the “Purchasers”) provides that the transaction
(the “Transaction”) is subject to a number of closing conditions, including court approval of the Arrangement, regulatory
approvals (including under the

Competition Act

(Canada) and the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, the Communications Act of 1934, as amended, and the Federal Power Act, as amended), as well as the receipt of certain
third-party consents.

The Transaction is also conditional on
the approval of two-thirds of the votes cast by holders of Atlantic Power’s common shares voting in person or by proxy at
a special meeting of Atlantic Power’s common shareholders and the approval of two-thirds of the votes cast by holders of
APPEL’s preferred shares (voting as a single class) in person or by proxy at a meeting of APPEL’s preferred shareholders
in respect of both the Arrangement and the proposed continuance of APPEL under the laws of British Columbia.

In addition, the Transaction is conditional
upon the approval of the holders of the convertible debentures and the medium term notes, respectively (in each case either by
way of votes of the holders of the convertible debentures and the medium term notes holding at least two-thirds of the principal
amount of the convertible debentures and the medium term notes, respectively, voted in person or by proxy at separate meetings
of the holders of the convertible debentures and the medium term notes or by way of separate written consents of the holders of
the convertible debentures and the medium term notes holding not less than two-thirds of the principal amount of convertible debentures
and medium term notes outstanding, as applicable), of certain amendments to the trust indentures governing such securities, as
described above. Atlantic Power and APLP will seek the approval of the holders of the convertible debentures and medium term notes
by way of separate meetings and/or consent solicitations.

A bondholder representing
approximately 66% of the principal amount of medium term notes and approximately 19% of the principal amount of convertible
debentures outstanding, has agreed to vote in favor of or otherwise consent to amendments to the trust indentures governing
those securities.

The Arrangement Agreement is subject to
customary non-solicitation provisions, including Atlantic Power’s right to consider and accept unsolicited superior proposals
in certain circumstances, subject to a right to match in favor of the Purchasers. A termination fee of US$12.5 million will be
payable by Atlantic Power to the Purchasers should the Transaction not close under certain circumstances, including if the Arrangement
is not completed as a result of Atlantic Power accepting an unsolicited superior proposal. A reverse termination fee of US$15
million will be payable by the Purchasers to Atlantic Power should the Transaction not close as a result of an uncured breach
by the Purchasers of the Arrangement Agreement (provided Atlantic Power is not then in breach of the Arrangement Agreement).

Further information regarding the Transaction,
including without limitation information regarding the Arrangement, the amendments to the trust indentures of the convertible
debentures and the medium term notes, the terms and conditions of the 0.25% consent fee in respect of the medium term notes, copies
of the fairness opinions and the various factors considered by the Board, the board of directors of APPEL and the board of directors
of the general partner of APLP will be included in Atlantic Power’s management information circular and proxy statement,
which will be mailed to Atlantic Power’s shareholders and APPEL’s preferred shareholders, and the management information
circulars and/or consent solicitation documents to be mailed to Atlantic Power’s convertible debenture holders and APLP’s
medium term noteholders. Copies of the Arrangement Agreement and the management information circulars will be available on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov, or through Atlantic Power’s website at www.atlanticpower.com.

Following closing of the Transaction,
the common shares of Atlantic Power will be delisted from the TSX and the NYSE and the preferred shares and convertible debentures
will be delisted from the TSX. The parties currently expect to close the Transaction in the second quarter of 2021.

Financial and Legal Advisors

Goldman Sachs & Co. LLC is acting
as lead financial advisor to the Special Committee. Blair Franklin Capital Partners Inc. is acting as financial advisor to the
Special Committee, the Board and the board of directors of APPEL and has provided its fairness opinions on a fixed-fee basis.
Cleary Gottlieb Steen & Hamilton LLP is acting as U.S. legal counsel to the Special Committee and Atlantic Power, and Goodmans
LLP is acting as Canadian legal counsel to the Special Committee and Atlantic Power. Kingsdale Advisors is acting as strategic
shareholder advisor and proxy solicitation agent to Atlantic Power.

RBC Capital Markets is acting as financial
advisor and arranging financing in support of the deal for I Squared Capital. Sidley Austin LLP is acting as U.S. legal counsel
to I Squared Capital, and Stikeman Elliott LLP is acting as Canadian legal counsel to I Squared Capital.

Investor Conference Call and Webcast

Atlantic Power’s management team
will host a telephone conference call and webcast to discuss this announcement on Friday, January 15, 2021 at 8:00 AM ET. An accompanying
presentation will be available on the Conference Calls page of Atlantic Power’s website prior to the call.

Phone Numbers

U.S. (Toll Free): +1 (855) 239-3193

Canada (Toll Free): +1 (855) 669-9657

International (Toll): +1 (412) 542-4129

Conference Access

: Please request
access to the Atlantic Power conference call.

: The call will be broadcast
over Atlantic Power’s website at

Replay

: Access conference call
number

10151644

at the following telephone numbers:

U.S. (Toll Free): +1 (877) 344-7529

Canada (Toll Free): +1 (855) 669-9658

International (Toll): +1 (412) 317-0088

The replay will be available one hour
after the end of the conference call through February 15, 2021 at 11:59 PM ET.

About Atlantic Power

Atlantic Power is an independent
power producer that owns power generation assets in eleven states in the United States and two provinces in Canada. Atlantic
Power’s generation projects sell electricity and steam to investment-grade utilities and other creditworthy large
customers predominantly under long term PPAs that have expiration dates ranging from 2021 to 2043. The company seeks to
minimize its exposure to commodity prices through provisions in the contracts, fuel supply agreements and hedging
arrangements. The projects are diversified by geography, fuel type, technology, dispatch profile and offtaker (customer).
Approximately 75% of the projects in operation are 100% owned and directly operated and maintained by Atlantic Power. The
company has expertise in operating most fuel types, including gas, hydro, and biomass, and it owns a 40% interest in one coal
project.

Atlantic Power’s shares trade on
the NYSE under the symbol AT and on the TSX under the symbol ATP. For more information, please visit Atlantic Power’s website
at www.atlanticpower.com.

Copies of Atlantic Power’s financial
data and other publicly filed documents are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under “Atlantic
Power Corporation” or on Atlantic Power’s website.

About I Squared Capital

I Squared Capital is an independent
global infrastructure investment manager focusing on energy, utilities, digital infrastructure, transport and social infrastructure
in the Americas, Europe and Asia. Headquartered in Miami, the firm has over $24 billion in assets under management and offices
in Hong Kong, London, New Delhi, New York and Singapore.

Cautionary Note Regarding Forward-Looking
Statements

To the extent any statements made in this
news release contain information that is not historical, these statements are forward-looking statements within the meaning of
Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended,
and under Canadian securities law (collectively, “forward-looking statements”).

Certain statements in this news release
may constitute forward-looking statements, which reflect the expectations of Atlantic Power’s management regarding the future
growth, results of operations, performance and business prospects and opportunities of Atlantic Power and its projects and the
Transaction. These statements, which are based on certain assumptions and describe Atlantic Power’s future plans, strategies
and expectations, can generally be identified by the use of the words “plans”, “expects”, “does
not expect”, “is expected”, “budget”, “estimates”, “forecasts”, “targets”,
“intends”, “anticipates” or “does not anticipate”, “believes”, “outlook”,
“objective”, or “continue”, or equivalents or variations, including negative variations, of such words
and phrases, or state that certain actions, events or results, “may”, “could”, “would”, “should”,
“might” or “will” be taken, occur or be achieved. Examples of such statements in this press release include,
but are not limited to, statements with respect to the following:

the
anticipated benefits of the Transaction to the parties, Atlantic Power’s shareholders
and convertible debenture holders, APPEL’s preferred shareholders and the holders
of medium term notes of APLP;

the
anticipated receipt of required regulatory, court and securityholder approvals for the
Transaction;

the
receipt of third-party consents necessary to satisfy closing conditions to the Transaction;

the
ability of the parties to satisfy the other conditions to, and to complete, the Transaction;

Atlantic
Power’s intention to hold meetings of its shareholders and convertible debenture
holders, APPEL’s intention to hold a meeting of APPEL’s preferred shareholders
and APLP’s intention to hold a meeting of the medium term noteholders;

the
mailing of the management information circular and proxy statement and/or consent solicitation
documents; and

the
anticipated timing of the closing of the Transaction.

Forward-looking statements involve significant
risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such performance or results will be achieved. Risks and uncertainties
inherent in the nature of the Transaction include, without limitation, the failure of Atlantic Power, APLP, APPEL and I Squared
Capital to obtain necessary securityholder, regulatory and court approvals, including those noted above, obtain third-party consents,
or to otherwise satisfy the conditions to the completion of the Transaction, in a timely manner, or at all, failure to realize
the expected benefits of the Transaction and general economic conditions. Failure to so obtain required approvals or consents,
or the failure of the parties to otherwise satisfy the conditions to or complete the Transaction, may result in the Transaction
not being completed on the proposed terms, or at all. Please also refer to the factors discussed under “Risk Factors”
and “Forward-Looking Information” in Atlantic Power’s periodic reports as filed with the SEC from time to time
for a detailed discussion of the risks and uncertainties affecting Atlantic Power. The anticipated dates provided may change for
a number of reasons, including unforeseen delays in preparing securityholder meeting or consent solicitation materials, the inability
to secure necessary securityholder, regulatory, court or other third-party approvals or consents in the time assumed, delays resulting
from the impact of the COVID-19 pandemic, or the need for additional time to satisfy the other conditions to the completion of
the Transaction. Although the forward-looking statements contained in this news release are based upon what are believed to be
reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements,
and the differences may be material. These forward-looking statements are made as of the date of this news release and, except
as expressly required by applicable law, Atlantic Power assumes no obligation to update or revise them to reflect new events or
circumstances.

Additional Information about the Arrangement
and Where to Find It

This news release is not intended to and
does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer
of securities in any jurisdiction in contravention of applicable law. This release is being made in respect of the Transaction
involving Atlantic Power, APPEL and I Squared Capital pursuant to the terms of the Arrangement Agreement by and among Atlantic
Power, APPEL and I Squared Capital and may be deemed to be soliciting material relating to the Transaction. In connection with
the Transaction, Atlantic Power will file a management information circular and proxy statement relating to a special meeting
of its common shareholders with the SEC and Canadian Securities Administrators. Additionally, Atlantic Power will file other relevant
materials in connection with the Transaction with the SEC.

Securityholders of Atlantic Power are urged to read the management
information circular and proxy statement regarding the Transaction and any other relevant materials carefully in their entirety
when they become available before making any voting or investment decision with respect to the Transaction because they will contain
important information about the Transaction and the parties to the Arrangement Agreement.

The definitive management information
circular and proxy statement will be mailed to Atlantic Power’s common shareholders. Securityholders of Atlantic Power will
be able to obtain a copy of the management information circular and proxy statement, and the filings with the SEC and Canadian
Securities Administrators that will be incorporated by reference into the proxy statement as well as other filings containing
information about the Transaction and the parties to the Arrangement Agreement made by Atlantic Power with the SEC and Canadian
Securities Administrators free of charge on EDGAR at www.sec.gov, on SEDAR at www.sedar.com, or on Atlantic Power’s website
at www.atlanticpower.com. Information contained on, or that may be accessed through, the websites referenced in this communication
is not incorporated into and does not constitute a part of this press release. We have included these website addresses only as
inactive textual references and do not intend them to be active links.

Participants in the Solicitation

Atlantic Power and its directors and
executive officers may be deemed to be participants in the solicitation of proxies from the holders of Atlantic Power’s
common shares in respect of the Transaction. Information about Atlantic Power’s directors and executive officers is set
forth in the proxy statement and proxy circular for Atlantic Power’s 2020 Annual General Meeting of Shareholders, which
was filed with the SEC and Canadian Securities Administrators on April 28, 2020. Investors may obtain additional information
regarding the interest of such participants by reading the management information circular and proxy statement regarding the
Transaction when it becomes available.

Contacts:

For Atlantic Power


Investor Relations


+1 (617) 977-2700


info@atlanticpower.com

For I Squared Capital


Andreas Moon, Managing Director and Head of Investor Relations


andreas.moon@isquaredcapital.com


+1 (786) 693-5739

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Atlantic Power: (Name Of Registrant As Specified In Its Charter) - Feb. 24, 2021
Preliminary proxy statements relating to merger or acquisition - Feb. 19, 2021
RBC Global Asset Management Inc. just provided an update on share ownership of Atlantic Power Corporation - Feb. 16, 2021
Neuberger Berman Investment Advisers LLC just provided an update on share ownership of Atlantic Power Corporation - Feb. 11, 2021
JPMORGAN CHASE & CO. just provided an update on share ownership of Atlantic Power Corporation - Feb. 8, 2021

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