- Transaction valuation represents approximately 32 multiple of
2023 Louisiana and Mississippi Local Distribution (LDC)
earnings
- Sale will enable company to efficiently recycle approximately
$1 billion in anticipated after-tax cash proceeds to support
industry-leading capital plan
- Transaction also enables CenterPoint to reprioritize future
capital investments related to those assets of approximately $1
billion elsewhere across its regulated Electric and Natural Gas
utility footprint
- Closing expected toward the end of first quarter of 2025
- Sale will not change company’s targeted utility non-GAAP EPS
growth rate of 8% in 2024, and the mid-to-high end of 6%-8%
annually from 2025 through 2030
- Company reiterates long-term confidence in and commitment to
its Natural Gas Business
CenterPoint Energy, Inc. (NYSE: CNP) (“CenterPoint”) today
announced the sale of its Louisiana and Mississippi natural gas LDC
businesses to Bernhard Capital Partners, a services and
infrastructure-focused private equity management firm, for $1.2
billion. The assets include approximately 12,000 miles of main
pipeline in Louisiana and Mississippi serving approximately 380,000
metered customers. CenterPoint’s LDCs are the second largest
natural gas LDCs in both Louisiana and Mississippi by customer
accounts, with a combined workforce of approximately 550
employees.
The sales price of $1.2 billion represents approximately 32
multiple of 2023 Louisiana and Mississippi LDC earnings. The
transaction is anticipated to close toward the end of first quarter
of 2025, subject to customary closing conditions, including
Hart-Scott-Rodino antitrust clearance and state regulatory
approvals.
“I would like to thank our Louisiana and Mississippi LDC
employees, as well as the team members who support these
businesses, for their focus on safety, performance, and results.
Together, they are our customers’ trusted energy partner in these
regions,” said Jason Wells, President and Chief Executive Officer
of CenterPoint. “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. 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.”
Wells added, “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.
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.
“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,” said Wells. “From an operational and
strategic perspective, we remain confident in and committed to our
regulated natural gas utilities in Texas, Indiana, Minnesota, and
Ohio where we have significant footprints and rate bases.”
CenterPoint’s Louisiana and Mississippi LDCs represent less than 4%
of the company’s overall rate base.
Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
served as CenterPoint’s financial advisors. Latham and Watkins LLP,
Phelps Dunbar LLP, and Brunini, Grantham, Grower & Hewes, PLLC
served as CenterPoint’s legal advisors.
About CenterPoint Energy, Inc.
As the only investor-owned electric and gas utility based in
Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery
company with electric transmission and distribution, power
generation and natural gas distribution operations that serve more
than 7 million metered customers in Indiana, Louisiana, Minnesota,
Mississippi, Ohio and Texas. As of September 30, 2023, the company
owned approximately $39 billion in assets. With approximately 8,900
employees, CenterPoint Energy and its predecessor companies have
been in business for more than 150 years. For more information,
visit www.CenterPointEnergy.com.
About Bernhard Capital Partners
Bernhard Capital Partners is a services and
infrastructure-focused private equity management firm established
in 2013. Bernhard Capital Partners has deployed capital in four
funds across several strategies and has approximately $3.4 billion
of gross assets under management. Bernhard Capital Partners seeks
to create sustainable value by leveraging its experience in
acquiring, operating and growing services and infrastructure
businesses. For more information, visit
www.BernhardCapital.com.
Use of Non-GAAP Measures
As included in this news release, CenterPoint provides guidance
based on non-GAAP income and non-GAAP diluted earnings per share.
Generally, a non-GAAP financial measure is a numerical measure of a
company’s historical or future financial performance that excludes
or includes amounts that are not normally excluded or included in
the most directly comparable GAAP financial measure.
Management evaluates CenterPoint’s financial performance in part
based on non-GAAP income and non-GAAP earnings per share.
Management believes that presenting these non-GAAP financial
measures enhances an investor’s understanding of CenterPoint’s
overall financial performance by providing them with an additional
meaningful and relevant comparison of current and anticipated
future results across periods. The adjustments made in these
non-GAAP financial measures exclude items that management believes
do not most accurately reflect the company’s fundamental business
performance. CenterPoint’s non-GAAP income and non-GAAP diluted
earnings per share measures should be considered as a supplement
to, and not as a substitute for, or superior to, income available
to common shareholders and diluted earnings per share, which
respectively are the most directly comparable GAAP financial
measures. These non-GAAP financial measures also may be different
than non-GAAP financial measures used by other companies.
2024 non-GAAP EPS guidance range
- 2024 non-GAAP EPS guidance excludes:
- Earnings or losses from the change in value of ZENS and related
securities; and
- Gain and impact, including related expenses, associated with
mergers and divestitures, such as the Louisiana and Mississippi gas
LDC sales.
In providing 2024 non-GAAP EPS guidance, CenterPoint does not
consider the items noted above and other potential impacts such as
changes in accounting standards, impairments, or other unusual
items, which could have a material impact on GAAP reported results
for the applicable guidance period. The 2024 non-GAAP EPS guidance
ranges also consider assumptions for certain significant variables
that may impact earnings, such as customer growth and usage
including normal weather, throughput, recovery of capital invested,
effective tax rates, financing activities and related interest
rates, and regulatory and judicial proceedings. To the extent
actual results deviate from these assumptions, the 2024 non-GAAP
EPS guidance ranges may not be met, or the projected annual
non-GAAP EPS growth rate may change. CenterPoint is unable to
present a quantitative reconciliation of forward-looking non-GAAP
diluted earnings per share without unreasonable effort because
changes in the value of ZENS and related securities, future
impairments, and other unusual items are not estimable and are
difficult to predict due to various factors outside of management’s
control.
Forward-Looking Statements
This news release may contain “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements
other than statements of historical fact included in this news
release are forward-looking statements made in good faith by us and
are intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of
1995. When used in this Current Report, the words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”
“goal,” “intend,” “may,” “objective,” “plan,” “potential,”
“predict,” “projection,” “should,” “target,” “will” or other
similar words are intended to identify forward-looking statements.
These forward-looking statements are based upon assumptions of
management which are believed to be reasonable at the time made and
are subject to significant risks and uncertainties. Actual events
and results may differ materially from those expressed or implied
by these forward-looking statements. Forward-looking statements
include, but are not limited to, the timing of the closing of the
Transaction. Each forward-looking statement contained in this news
release speaks only as of the date of this report. Important
factors that could cause actual results to differ materially from
those indicated by the provided forward-looking information include
risks and uncertainties relating to (1) the timing of the
expiration or termination of the Hart-Scott-Rodino waiting period
and the receipt of any consents, waivers or approvals required to
be obtained pursuant to applicable antitrust laws, (2) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Transaction or could otherwise
cause the failure of the Transaction to close, (3) the risk that a
condition to the closing of the Transaction may not be satisfied,
including obtaining required regulatory approvals, (4) the outcome
of any legal proceedings, regulatory proceedings or enforcement
matters that may be instituted relating to the Transaction, (5) the
timing to consummate the Transaction, (6) disruption from the
Transaction making it more difficult to maintain relationships with
customers, employees, regulators or suppliers, (7) the diversion of
management time and attention on the Transaction and (8) other
factors discussed in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2023 and other reports the
Company may file from time to time with the Securities and Exchange
Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20240219218576/en/
Media: Media.relations@CenterPointEnergy.com
Investors: Jackie Richert/Ben Vallejo Phone:
713.207.6500
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