Services and infrastructure-focused private equity manager Bernhard Capital Partners is acquiring $1.2bn (€1.1bn) Louisiana and Mississippi natural gas assets from US utility CenterPoint Energy.
Bernhard Capital’s portfolio company Delta Utilities has agreed to buy 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.
Jeff Jenkins, founder and partner at Bernhard Capital Partners, said the acquisition builds upon the firm’s recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, adding that “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 US”.
Jason Wells, president and CEO of NYSE-listed CenterPoint Energy, said the transaction will allow the firm to optimise its portfolio of utility operations and efficiently recycle approximately $1bn 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”.
Wells added: “The sale will also enable us to redeploy approximately $1bn of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.”
Wells said the lates deal is the fourth time over the past few years in which CenterPoint has recycled sales proceeds and reinvested them in regulated businesses for the benefit of all stakeholders.
“Our natural gas business is core to our company and together with our electric business will continue to be a cornerstone of our long-term growth strategy,” added Wells.
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