Energy and services company Emera has reached an agreement to sell New Mexico Gas Company (NMGC) to Bernhard Capital Partners (BCP) for an aggregate transaction value of $1.25bn (C$1.73bn).
The deal includes the assumption of approximately $500m of NMGC's debt.
Acquired by Emera in 2016 as part of the TECO group of companies, NMGC is a wholly owned subsidiary of Emera.
According to Emera, NMGC has since grown to become the largest natural gas utility in New Mexico.
Currently, it serves more than 545,000 customers and manages around 19,000km of gas transmission and distribution pipelines.
The sale price reflects approximately 23-times the last 12 months' earnings and 1.42-times the rate base.
Emera stated that the estimated after-tax net proceeds of roughly $750m will be utilised to repay holding company debt and support investment opportunities in its regulated utility businesses.
The deal requires approval from the New Mexico Public Regulation Commission and must comply with the Hart-Scott-Rodino Antitrust Improvements Act.
It is due to be concluded in late 2025.
Emera president and CEO Scott Balfour said: “This transaction strengthens Emera’s balance sheet, supports our ambitious capital plan and reinforces our strategic decision to optimise our portfolio and reallocate capital to our highest growth markets to drive long-term value for our shareholders.
“New Mexico Gas is a strong regulated utility with a customer-focused team. We are proud of the work we have done together over the past eight years to drive customer growth and enable nearly $800m in strategic capital investments to expand and maintain a safe, reliable system that will serve New Mexicans for decades to come.”
Bernhard Capital Partners founder and partner Jeff Jenkins said: “We value the strong history of New Mexico Gas Company and are committed to retaining the invaluable institutional knowledge of its employees.
“The leadership team and all employees will remain in place after closing, and we anticipate creating approximately 70 new, local jobs. Our priority is ensuring the continuation of reliable, affordable natural gas service to customers and communities across the state.”
BCP, a services and infrastructure-focused private equity management firm, has made investments in nearly 70 companies across 20 platforms, including several utility companies, and employs around 20,000 people globally.
Earlier this year, BCP-backed Delta Utilities agreed to acquire CenterPoint Energy's natural gas distribution operations in Louisiana and Mississippi.
