BY Richard Summerfield
Bernhard Capital Partners has announced it is to acquire CenterPoint Energy’s Louisiana and Mississippi natural gas assets for $1.2bn.
Under the terms of the deal, Bernhard Capital’s portfolio company Delta Utilities will acquire CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution businesses which include around 12,000 miles of main pipeline in Louisiana and Mississippi serving approximately 380,000 metered customers. The assets represent less than 4 percent of CenterPoint’s overall rate base.
According to a statement announcing the deal, the sales price of $1.2bn represents approximately 32 multiples of the assets’ 2023 earnings. The transaction is anticipated to close toward the end of first quarter of 2025, subject to customary closing conditions, including antitrust clearance and state regulatory approvals.
“The transaction will allow us to optimize our portfolio of utility operations and efficiently recycle approximately $1 billion in after-tax cash proceeds into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity,” said Jason Wells, president and chief executive of CenterPoint. “The sale will also enable us to redeploy approximately $1 billion of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.
“This will mark the fourth time over the past few years in which we have recycled sales proceeds and reinvested them in our regulated businesses for the benefit of all stakeholders,” he continued. “The transaction, along with the reinvested capital, will not change our targeted non-GAAP EPS growth rate of 8% in 2024, and the mid-to-high end of 6%-8% annually from 2025 through 2030. The efficiency of this transaction and portfolio optimization will further enhance our ability to continue executing our industry-leading long-term growth strategy for years to come.”
“This transaction will bring together deep expertise and leadership with many years of experience in utility operations and the invaluable institutional knowledge of those who have operated these systems for decades to benefit customers,” said Jeff Jenkins, founder and partner at Bernhard Capital Partners. “It builds upon our recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, establishing stronger, more resilient communities across the Gulf South. Once both transactions are complete, Delta Utilities will be a leading natural gas utility in Louisiana and Mississippi and among the top 40 providers in the United States.”
News: CenterPoint to sell Louisiana and Mississippi natgas assets for $1.2 bln