Parent Of Canadian Retail Supplier To Purchase U.S. Utility With Retail Choice Program
March 25, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Emera Inc. and ENMAX Corporation (ENMAX) today announced that they have entered into a definitive agreement in which Emera has agreed to sell to ENMAX its interest in Emera Maine, its regulated electric transmission and distribution company in Maine, for a purchase price of $959 million USD ($1,286 million CAD). Including the assumed debt, aggregate enterprise value is forecasted to be approximately $1.3 billion USD ($1.8 billion CAD) on closing.
Emera Maine includes the former Bangor Hydro-Electric and Maine Public Service service areas. Emera Maine is headquartered in Bangor and serves 159,000 customers in the northern part of the state.
ENMAX's ENMAX Energy Corporation acts as a competitive retail and natural gas supplier in Alberta, and also administers the regulated rate option in certain areas. ENMAX's ENMAX Power Corporation owns an electricity transmission and distribution system in and around Calgary
"This transaction reflects ENMAX’s strategy to grow through the expansion of its regulated utility business in North America, leveraging ENMAX’s established expertise in the provision of regulated transmission and distribution electricity services. The addition of approximately $900 million CAD in regulated rate base assets to ENMAX’s portfolio results in a 50 per cent increase in regulated rate base, with 70 per cent of ENMAX’s future cash flows being derived from regulated and non-commodity sources, providing stable, high-quality earnings to ENMAX. ENMAX is funding this transaction 100 per cent through debt. Inclusive of incremental transaction financing, this transaction will be immediately accretive to earnings and cash flow," ENMAX said
"The acquisition of Emera Maine is a complementary opportunity for ENMAX to grow our regulated utility business and enhance our connections with customers," said Gianna Manes, President and CEO of ENMAX.
"This transaction is part of Emera’s previously announced three-year funding plan and together with the previously announced sale of its New England Gas Generation portfolio will, on closing, fully achieve the targeted asset sale component of the plan. Upon closing of these transactions Emera will have raised approximately $2.1 billion CAD of equity proceeds which will be used to reduce Emera corporate level debt and support its $6.5 billion CAD three-year regulated capital program," Emera said
"We are very pleased with the progress we’ve made on optimizing our portfolio and, upon closing, proceeds raised through select asset sales will give us greater financial flexibility as we fund our continued growth," said Scott Balfour, President and CEO of Emera.
The transaction is subject to certain conditions and obtaining regulatory approvals, including those of the Maine Public Utilities Commission, the United States Federal Energy Regulatory Commission and pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, and is anticipated to close late in 2019.