Laclede Expands Into Alabama
Laclede Group has acquired another natural gas utility, this one outside Missouri.
The company announced Monday it will buy the Alabama Gas Corporation, known as Alagasco, from Energen Corp. for $1.6 billion.
Energen had been seeking a buyer since early this year.
Laclede Group President and CEO Suzanne Sitherwood said the effective cost would drop to $1.34 billion after taking tax benefits of about $260 million dollars into account. The acquisition is also expected to generate net revenues in the first year.
"It’s accretive from year one, which means we’ll have shareholder value from year one," Sitherwood said. "That’s important because we need to attract capital to replace pipe and put new pipe in the ground, as well as for the acquisition."
Sitherwood said Alagasco is similar in size and business structure to both Laclede and its earlier acquisition, Missouri Gas Energy.
"Both Laclede Gas, MGE and Alagasco are gas companies that were formed in the mid-1800s and have been serving their customers for all those years," Sitherwood said. "The other similarity is they’re in very urban areas and then their pipeline infrastructure stretches into the more rural areas, so they do have a mixed customer base."
Since Sitherwood arrived at Laclede in 2011 she has made it clear that the company should grow. Last September the corporation finalized its purchase of Missouri Gas Energy for $975 million, doubling its customer base. Now it’s adding another 422,000 bringing the total number of Laclede customers to 1.55 million. Sitherwood said more is likely to come.
"It wasn’t one and done [with Missouri Gas Energy], and now’s not a two and done," she said. "We’ll continue to stay on path with our vision for our company and when those opportunities come along we’ll make a determination if it’s right for us at that time."
Laclede is receiving $1.35 billion in bridge financing from Credit Suisse and Wells Fargo Bank. The corporation also is assuming $250 million of existing Alagasco long-term debt.
The sale is expected to become final this year.
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