San Diego-based Sempra Energy closed its purchase of Mobile, AL-based EnergySouth Inc. for $510 million in cash. EnergySouth is absorbed into Sempra Pipelines & Storage.
A “substantial majority” of EnergySouth shareholders approved the sale Tuesday; they will receive $61.50/share. The transaction has received all necessary regulatory approvals, including the federal antitrust clearance under the Hart-Scott-Rodino Act.
Announced in late July, Sempra’s acquisition gives it a majority ownership in two large, high-cycle underground gas storage facilities that when fully developed will have a combined capacity of 57 Bcf (see Daily GPI, July 29).
Sempra CEO Donald Felsinger said the Gulf Coast is a critical hub for North America and these new assets allow the area “to quickly expand our natural gas infrastructure business in the region.”
When the deal was announced Standard & Poor’s Ratings Services (S&P) revised to “negative” the ratings outlook on Sempra Energy, citing the deal’s provision that Sempra assume $283 million of EnergySouth debt. S&P affirmed the company’s “BBB+” corporate credit rating and its “A” rating on Sempra’s California utility subsidiaries.
Included in the purchase is Mobile Gas Service Corp., an Alabama gas distribution utility owned by EnergySouth. Mobile Gas serves about 93,000 retail customers in southwest Alabama. Sempra said than James Fine has been named president of Mobile Gas after previously serving as the company’s vice president for operations.
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