UGI Corp. said Monday it would acquire Mountaineer Energy Holdings LLC, which owns the largest natural gas local distribution company (LDC) in West Virginia, for an enterprise value of $540 million, including about $140 million of debt.

The acquisition would hand UGI control of Mountaineer Gas Co., a single-state LDC adjacent to UGI’s existing utility footprint and the largest in West Virginia. UGI’s regulated utility rate base would climb by 14%, while customers served would increase by around 30%. 

Mountaineer serves close to 215,000 customers in 50 of West Virginia’s 55 counties. Ninety percent of the customer base is residential, with the remainder made up of commercial and industrial customers. Mountaineer has almost 6,000 miles of regulated distribution, transmission...