Ontario-based Algonquin Power & Utilities Corp. (APUC) unit Liberty Energy Utilities Co. is buying Granite State Electric Co. and EnergyNorth Natural Gas Inc. from National Grid USA for $285 million, APUC said Thursday.
EnergyNorth is a regulated gas distribution utility serving more than 83,000 customers in five counties and 30 communities in New Hampshire.
Granite State is a regulated electric utility serving more than 43,000 customers in 21 communities in New Hampshire. Its load and customer count have shown a consistent 1.6% compounded annual growth over the past 10 years, APUC said.
The two utilities are expected to have regulatory assets at the deal's closing of $72 million and $178.8 million, respectively; the purchase price represents a multiple of the assets' estimated value of 1.136.
Closings are subject to state and federal regulatory approval and are expected to occur in fall 2011. Financing is expected to take place with closing. Liberty Energy is targeting a capital structure of 52.5% debt to total capitalization consistent with investment-grade regulated utilities, APUC said.
"The acquisition of these attractive businesses represent the continuation of APUC's regulated utility growth strategy and will provide long-term, predictable and accretive earnings to APUC," said APUC CEO Ian Robertson. "The expansion of our regulated utility footprint into the attractive New Hampshire regulatory environment and a geographic region where we already have a substantial presence through our renewable energy business is consistent with our plan to maximize synergies between our power and utilities businesses."
APUC owns and operates about $1 billion worth of renewable power generation and utility distribution businesses in North America. Algonquin Power Co., APUC's electric generation subsidiary, includes 45 renewable energy facilities and 14 thermal energy facilities representing more than 480 MW of installed capacity.
Through Liberty Energy, APUC plans to also acquire CalPeco, the California-based regulated utility assets of NV Energy.
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