Acquisitions

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS

2022 Activity

New Energy. On April 15, 2022, a wholly-owned subsidiary of ALLETE acquired 100 percent of the membership interests of New Energy for a purchase price of $165.5 million. Total consideration of approximately $158.8 million was paid in cash on the acquisition date, which is net of cash acquired and debt assumed. New Energy, which is headquartered in Annapolis, Maryland, is a renewable energy development company with a primary focus on solar and storage facilities while also offering comprehensive operations, maintenance and asset management services. The acquisition of New Energy is consistent with ALLETE’s stated strategy of additional investment in renewable energy and related infrastructure across North America to support the Company’s sustainability-in-action strategy while providing potential long-term earnings growth.

The acquisition was accounted for as a business combination and the purchase price was allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition. The allocation of the purchase price, which was finalized in the fourth quarter of 2022, is shown in the following table. Fair value measurements were valued primarily using the discounted cash flow method and replacement cost basis. The goodwill recorded is primarily attributable to the highly skilled workforce of New Energy and synergies expected to arise as a result of the acquisition.

Since the acquisition in April 2022, aggregate revenue was $80.2 million. The Company has not presented separate results of operations since closing or combined pro forma financial information of the Company and New Energy since the beginning of 2021, as the results of operations for New Energy are not material to the Company's consolidated financials.


Millions
Assets Acquired
Cash and Cash Equivalents												$3.9
Accounts Receivable												1.4
Inventory (a)												25.3
Other Current Assets												12.8
Property, Plant and Equipment - Net												16.4
Goodwill (b)												154.9
Other Non-Current Assets												2.1
Total Assets Acquired												$216.8
Liabilities Assumed
Current Liabilities												$23.6
Long-Term Debt Due Within One Year												28.3
Long-Term Debt												5.9
Other Non-Current Liabilities												0.2
Total Liabilities Assumed												$58.0
Net Identifiable Assets Acquired												$158.8

(a)Includes $11.6 million of purchase price accounting for certain projects under development at the time of acquisition.

(b)For tax purpose, the purchase price allocation resulted in $154.9 million of deductible goodwill.

Acquisition-related costs were $2.7 million after-tax, expensed as incurred during 2022 and recorded in Operating and Maintenance on the Consolidated Statement of Income.