AmeriGas Grabs Columbia, Becomes Top U.S. Propane Marketer
AmeriGas Partners LP became the nation's largest retail propane marketer by completing the $202 million purchase of Columbia Propane from NiSource in a deal that closed last Tuesday. The combination will distribute more than one billion retail gallons per year from more than 700 locations.
"We expect the financial results of Columbia to be accretive to earnings and cash flow in fiscal year 2002," said AmeriGas Chairman Lon R. Greenberg. He said the purchase, including transaction costs, was financed with the proceeds of the sale of $161 million of newly issued AmeriGas Partners senior notes and the issuance of approximately 2.35 million AmeriGas common units to Columbia Energy.
"The sale of Columbia Propane is in line with NiSource's announced asset sale program and consistent with our strategy of focusing on our core gas and electric businesses,'' said NiSource CEO Gary L. Neale.
Columbia Propane is the fifth largest propane marketer in the United States with operations in more than 30 states and nearly 350,000 customers. Annualized sales are 270 million gallons. The company had been a target for growth over the past several years. It is operator and half owner (with Conoco) of Atlantic Energy, Inc., one of three exclusive propane import terminals on the East Coast. Located in Chesapeake, VA, on the Elizabeth River, Atlantic Energy has two 10-million gallon storage tanks.
"The Columbia operations add density to our existing operations, provide us with opportunities to penetrate new markets and will expand our PPX grill cylinder exchange business," said AmeriGas CEO Eugene V. N. Bissell. "We believe this transaction not only enhances our ability to serve customers, but also presents additional opportunities for the employees of both companies," he added.
UGI Corp. through subsidiaries owns 52% of the AmeriGas partnership and individual unitholders own the remaining 48%.
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