TNP Enterprises, the parent company of Texas-New Mexico PowerCo. (TNMP), was bought by a group of investors headed by WilliamCatacosinos, the former CEO of Long Island Lighting Co., for $1billion, including assumed debt, the parties announced last week.The deal, which TNP said was the first leveraged buyout of anelectric utility, is expected to close in six to nine months.

The electric utility said the transaction signified aninnovative approach on its part to deal with the consolidationtrend. The investor group will allow the utility to operate as astand-alone entity. No layoffs will result from the transaction,and TNMP’s transition to competition in its service area will notbe affected. TNP serves 229,000 customers in Texas and New Mexico.

“It allows us to continue our community-based service programsfor our customers,” said Kevern Joyce, CEO of TNP Enterprises, “andgives us an opportunity to be part of a growing business with nolayoffs for our employees.”

The agreement has been unanimously approved by TNP’s board ofdirectors. Shareholders will receive $44/share in cash, whichequals a 39% premium over the 30-day average price. The investorgroup will assume $400 million in TNP debt, a TNP spokespersonsaid. If the deal is approved, TNP will have switched from a publiccorporation to a privately owned corporation.

The transaction still needs approvals from FERC, TNP Enterprisesshareholders, and regulators in New Mexico and Texas.

John Norris

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