ST. LOUIS, April 26, 2016 /PRNewswire/ -- The Laclede
Group, Inc. (NYSE: LG) ("Company" or "Laclede") today announced an agreement with
Sempra U.S. Gas & Power, a unit of Sempra Energy (NYSE: SRE),
to acquire the parent company of Mobile Gas, serving 85,000 natural
gas utility customers in Alabama,
and Willmut Gas, with 19,000 customers in Mississippi.
Laclede is acquiring 100
percent of the outstanding equity of EnergySouth, Inc., the parent
of Mobile Gas and Willmut Gas, for $344
million. All non-utility businesses in EnergySouth will be
retained by Sempra. After the inclusion of working capital
adjustments and the assumption of $67
million in debt, the transaction is expected to result in
total cash proceeds of $323 million.
Closing on the transaction is expected to occur in 2016.
"Welcoming Mobile and Willmut supports our strategy to provide
customer benefits and deliver long-term earnings growth and
shareholder value," said Suzanne
Sitherwood, president and chief executive officer. "These
additions allow us to build on our significant presence in
Alabama, where we are the largest
natural gas distribution company in the state, and expands our
geographic reach into Mississippi."
STRATEGIC RATIONALE
- Aligns with our growth strategy. This transaction is
strategically aligned with our focus on growth through acquiring
and organically growing gas utilities to deliver customer benefits
and long-term shareholder value. It also builds on our proven
process and success in integrating, financing and operating our
companies.
- Expands our southern footprint. The addition of Mobile
Gas builds upon our significant footprint and working relationships
in Alabama. Willmut Gas expands
our reach into Mississippi and
provides further regulatory diversity, adding another state with a
highly rated regulatory environment.
- Adds to our earnings and cash flow. The transaction is
expected to be neutral to net economic earnings per share in 2017
and accretive in 2018, and is expected to support our long-term
annual earnings growth target of four percent to six percent.
Further, cash flows from Mobile Gas and Willmut Gas will support
investment in the business, increased shareholder value and growing
dividends.
TRANSACTION DETAILS
The purchase consideration will include assumption of
$67 million of existing debt at the
two utilities. We expect the financing to include a balanced mix of
common stock and new long-term debt, cash on hand and available
credit facilities. This transaction is expected to close in 2016,
subject to customary closing conditions and regulatory approvals.
Moelis & Company LLC acted as exclusive financial advisor.
Morgan Stanley will act as the lead for equity and debt offerings.
Akin Gump Strauss Hauer & Feld LLP acted as legal
counsel.
CONFERENCE CALL AND WEBCAST
To access our conference call and webcast today, please dial the
number below 5-10 minutes prior to the start.
Date and
Time:
|
Today – Tuesday,
April 26
|
|
9 a.m. CDT (10 a.m.
EDT)
|
|
|
Phone
Numbers:
|
U.S./Canada: 1-866-652-5200
|
|
International:
1-412-317-6060
|
The call will also be webcast in a listen-only format for the
media and general public. The webcast can be accessed at
www.TheLacledeGroup.com under the Investor Relations tab. A
replay of the call will be available beginning at 11 a.m. CDT (12 p.m.
EDT) today and continuing until May
26, by dialing 1-877-344-7529 (U.S.), 1-855-669-9658
(Canada), or 1-412-317-0088
(International). The Replay Access Code is 10085349. A webcast
replay will also be available starting later today and will be
accessible on our website.
ABOUT THE COMPANY
The Laclede Group, Inc. (NYSE: LG), will become Spire Inc. on
April 28, 2016 subject to shareholder
approval. The company, headquartered in St. Louis, Missouri, is a public utility
holding company whose primary business is the safe and reliable
delivery of natural gas service to more than 1.56 million
residential, commercial and industrial customers across
Missouri and Alabama. Its Gas Utility segment consists of
three natural gas utilities: Laclede Gas Company (serving
St. Louis and eastern Missouri), Missouri Gas Energy (serving
Kansas City and western
Missouri) and Alabama Gas
Corporation (serving central and northern Alabama, including Birmingham and Montgomery). Laclede's non-utility businesses include
Laclede Energy Resources, Inc., providing non-regulated natural gas
services, and Spire which provides compressed natural gas (CNG)
fueling solutions for transportation fleets. Laclede is committed to transforming its
business and pursuing growth by 1) growing its Gas Utility business
through prudent infrastructure upgrade investment and organic
growth initiatives; 2) acquiring and integrating gas utilities; 3)
modernizing its gas supply assets, and 4) investing in innovation
and emerging markets.
For more information about Laclede and its subsidiaries,
visit www.TheLacledeGroup.com.
CAUTIONARY STATEMENTS ON FORWARD-LOOKING INFORMATION
This press release may include certain statements concerning
expectations for the future, including statements regarding the
anticipated benefits and other aspects of the transaction described
above, that are forward-looking statements as defined by federal
law. Such forward-looking statements are subject to a variety of
known and unknown risks, uncertainties, and other factors that are
difficult to predict and many of which are beyond the control of
the management team of Laclede.
Among those are the risks that the transaction described above may
not be consummated, that the anticipated benefits from the
transaction may not be fully realized, and that dividends are at
the discretion of the board of directors, are not guaranteed and
may be restricted by certain debt covenants. An extensive list of
factors that can affect future results are discussed in the reports
filed with the Securities and Exchange Commission by Laclede. Laclede does not undertake any obligation to
update or revise any forward-looking statement to reflect new
information or events.
NON-GAAP MEASURES
Net economic earnings (NEE) and NEE per share are non-GAAP
measures used by management when evaluating the Company's
performance. NEE excludes from net income the after-tax impacts of
fair value accounting and timing adjustments associated with
energy-related transactions, as well as the after-tax impacts
related to acquisition, divestiture and restructuring activities,
including one-time costs related to integration. A full explanation
of the adjustments and a reconciliation of net income to net
economic earnings are contained in the Company's SEC filings.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/laclede-to-acquire-parent-company-of-mobile-gas-and-willmut-gas-300257227.html
SOURCE The Laclede Group, Inc.