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Pinnacle files preliminary prospectus for proposed IPO

The world's third-largest wood pellets producer, Canada-based Pinnacle Renewable Holdings Inc, has recently filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada for a proposed initial public offering (IPO).

Pinnacle railcars with pellets at the Fiberco terminal in the Port of Vancouver, British Columbia (BC).

Pinnacle Renewable Holdings Inc. announced December 15 that it had filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada for a proposed initial public offering (IPO) of common shares. According to Reuters, Pinnacle aims to raise about CA$175 million from the share sale.

The IPO is being co-led by CIBC Capital Markets and RBC Capital Markets, together with BMO Nesbitt Burns Inc. and Scotia Capital Inc., as joint bookrunners and National Bank Financial Inc., GMP Securities L.P., Raymond James Ltd. and HSBC Securities (Canada) Inc., as underwriters. The filed preliminary prospectus is still subject to completion or amendment.

Founded in 1989 as Pinnacle Pellets, the company manufactures industrial fuel pellets, residential pellet fuels, natural sorbents, and animal bedding pellets. In 2011, ONCAP, a unit of Canadian private equity company Onex Corporation acquired a majority stake in Pinnacle for CA$71 million.

In 2012 the company changed the name to Pinnacle Renewable Energy Inc and currently operates six industrial wood pellet production facilities with a combined annual production capacity in excess of 1.4 million tonnes making it the third largest pellet producer in the world.

In addition, it owns and operates a pellet port terminal in the Port of Prince Rupert in northern British Columbia (BC), and has new production facilities under development in Entwistle, Alberta (c. 400 000 tonnes per annum) and Smithers, BC (c. 125 000 tpa).

According to Pinnacle, it has entered into long-term “take-or-pay” contracts with utilities in Europe and Asia that represent 100 percent of production capacity through 2021 and nearly 80 percent of its production capacity through 2026.

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