By Lisa Kerner
Charlotte, N.C., July 28 - Sempra Energy will acquire EnergySouth, Inc. for $61.50 per share, or a total of $510 million in cash.
According to Sempra Energy, central to the transaction will be the acquisition of the assets of EnergySouth's subsidiary, EnergySouth Midstream, Inc., including a majority ownership in two large, high-cycle underground natural gas storage facilities.
Sempra Energy will also acquire EnergySouth's Mobile Gas Service Corp., an Alabama natural gas distribution utility.
Upon completion of the acquisition, Sempra Energy's Sempra Pipelines & Storage unit will operate the EnergySouth assets, a joint company news release stated.
Sempra Energy said it will fund the transaction from operating cash flow and debt, noting it will continue its previously announced $1.5 billion share-repurchase program.
The transaction is expected to close by the end of the year, subject to shareholder approval.
Both companies' boards of directors have approved the agreement, which includes a $25 million termination fee, it was reported in a form 8-K filing with the Securities and Exchange Commission.
"This acquisition supports our natural gas strategy by expanding our Gulf Coast operations to serve key markets where gas demand outpaces the national average," Donald E. Felsinger, chairman and chief executive officer of Sempra Energy, said in the release. "These new assets complement our existing operations in the region and position us for future growth."
The transaction is expected to be slightly accretive to earnings in 2009 and to contribute up to $0.30 per share in 2012, according to Felsinger.
J.P. Morgan Securities Inc. and Berenson & Co. advised EnergySouth.
EnergySouth is a Mobile, Ala.-based holding company for a group of energy-related subsidiaries operating in the midstream services and distribution segments of the natural gas industry.
Sempra Pipelines & Storage operates Liberty Gas Storage, an underground natural gas storage facility in Calcasieu Parish, La. Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company.
| Acquirer: | Sempra Energy
|
| Target: | EnergySouth, Inc.
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| Announcement date: | July 28
|
| Transaction total: | $510 million
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| Price per share: | $61.50
|
| Termination fee: | $25 million
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| Expected closing: | End of 2008
|
| Stock price for target: | Nasdaq: ENSI: $50.16 on July 25
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