Emera to close US$10.4 billion deal for TECO Energy

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Emera and TECO Energy has closed a definitive agreement for Emera to acquire TECO Energy, creating a North American energy firm, with over US$20 billion of assets and more than 2.4 million electric and gas customers.

Specifically the deal creates a top 20 North American regulated utility with geographic diversity and significant growth potential. Based on pro forma financial information as at June 30, 2015, following the completion of the transaction Emera’s total assets will increase to approximately US$20 billion, with 56 percent of those assets in Florida, 23 percent in Canada, 10 percent in New England, 6 percent in New Mexico and 5 percent in the Caribbean.

Upon closing, TECO Energy will become a wholly owned subsidiary of Emera.

Under the terms of the all-cash deal, which has been unanimously approved by the Board of Directors of both companies, TECO Energy shareholders will receive US$27.55 per common share. This represents an aggregate purchase price of approximately US$10.4 billion including assumption of approximately US$3.9 billion of debt.

Emera has a fully committed US$6.5 billion bridge financing facility in place with JP Morgan Chase and Scotiabank. Permanent financing of the transaction is expected to be obtained by one or more placements of common equity, preferred equity and long term debt, the timing of which is expected to be influenced by the regulatory approvals process and subject to prevailing market conditions.

The closing of the transaction is expected to occur by mid-2016, is subject to TECO Energy common shareholder approval and certain regulatory and government approvals.

J.P. Morgan acted as lead financial advisor and Scotiabank acted as financial advisor to Emera. Legal advisors to Emera were Davis Polk & Wardwell LLP and Osler, Hoskin & Harcourt LLP. Morgan Stanley acted as the lead strategic and financial advisor and Moelis & Company acted as financial advisor to TECO Energy. Skadden Arps, Slate, Meagher & Flom LLP and Holland & Knight LLP acted as legal counsel.

Chris Huskilson, President and CEO of Emera, stated:

“Our patient approach and disciplined investment criteria have resulted in a pure-play regulated utility transaction that we expect to be significantly accretive for Emera’s shareholders, and one that advances our strategic objectives. We have found our ideal match in TECO Energy.”

TECO Energy President and CEO John Ramil commented:

TECO Energy’s team members have worked hard to consistently generate strong financial and operating results from our regulated businesses and have positioned the company well for long-term earnings growth. We are proud that Emera has recognized the value of our business and that our shareholders will be rewarded for their confidence in our company. The TECO team looks forward to contributing to Emera’s bright future and the opportunities for growth across the organization.”

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