Gas Natural Inc., a holding company operating local natural gas utilities serving approximately 68,000 customers in four states, has announced the signing of a definitive merger agreement with an energy infrastructure investment fund sponsored by First Reserve, a global private equity and infrastructure investment firm focused exclusively on energy.
Under the terms of the agreement, First Reserve has agreed to acquire all of the outstanding shares of Gas Natural common stock for US$13.10 per share, for a total enterprise value of approximately US$196 million. The purchase price represents an approximate premium of 39% over Gas Natural's 52-week high.
After closing of the transaction, the business plan is for Gas Natural to maintain its own leadership team and employees with no changes in staffing, customer rates and community involvement across its areas of operation. All of the natural gas utility subsidiaries in Maine, Montana, North Carolina and Ohio, as well as any nonregulated operations, will maintain focus on the execution of their current business plans.
The transaction is subject to, among other customary closing conditions, the approvals of the Maine Public Utilities Commission, Montana Public Service Commission, North Carolina Utilities Commission, Public Utility Commission of Ohio and Gas Natural's shareholders and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
Gas Natural and First Reserve expect to complete the transaction in the second half of 2017.
Janney is serving as exclusive financial advisor to Gas Natural and Kohrman Jackson & Krantz LLP is serving as legal counsel.
Gregory J. Osborne, Gas Natural's President and Chief Executive Officer, commented:
"This agreement validates the strength of our franchise, provides great opportunity for our employees, ensures continuity of management and processes for our regulators, and rewards our shareholders for their commitment. Equally as important, there will not be any change to our organization or operations. In partnering with First Reserve, a long-term investor excited about the opportunity for continued investment, we maintain our strong dedication to providing safe, clean, reliable and affordable energy to our customers and to expanding the number of customers that have access to our responsive, quality service."
Mark Florian, Head of Infrastructure Funds for First Reserve, added:
"First Reserve has decades of experience managing energy and utility investments and is excited about the potential of the natural gas distribution sector. We view Gas Natural as an ideal platform for long-term investment in the space given its diversified asset base, strong management team and commitment to its customers. We look forward to continuing to provide capital support to the Company and are excited to add Gas Natural to our portfolio on behalf of our investors."