CenterPoint Energy announced the sale of its Louisiana and Mississippi natural gas LDC businesses to Bernhard Capital Partners, a services and infrastructure-focused private equity management firm, for $1.2 billion. The assets include about 12,000 miles of main pipeline in Louisiana and Mississippi, serving about 380,000 metered customers. And CenterPoint’s LDCs are the second largest natural gas LDCs in both Louisiana and Mississippi by customer accounts, with a combined workforce of approximately 550 employees.
The sales price of $1.2 billion represents about 32 multiple of 2023 Louisiana and Mississippi LDC earnings. The deal is anticipated to close toward the end of first quarter of 2025, subject to customary closing conditions, including Hart-Scott-Rodino antitrust clearance and state regulatory approvals.
CenterPoint’s Louisiana and Mississippi LDCs represent under 4% of the company’s overall rate base. And Morgan Stanley and Wells Fargo Securities served as CenterPoint’s financial advisors. Latham and Watkins, Phelps Dunbar, and Brunini, Grantham, Grower & Hewes served as CenterPoint’s legal advisors.
KEY QUOTES:
“I would like to thank our Louisiana and Mississippi LDC employees, as well as the team members who support these businesses, for their focus on safety, performance, and results. Together, they are our customers’ trusted energy partner in these regions. The transaction will allow us to optimize our portfolio of utility operations and efficiently recycle approximately $1 billion in after-tax cash proceeds into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity. The sale will also enable us to redeploy approximately $1 billion of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.”
“This will mark the fourth time over the past few years in which we have recycled sales proceeds and reinvested them in our regulated businesses for the benefit of all stakeholders. The transaction, along with the reinvested capital, will not change our targeted non-GAAP EPS growth rate of 8% in 2024, and the mid-to-high end of 6%-8% annually from 2025 through 2030. The efficiency of this transaction and portfolio optimization will further enhance our ability to continue executing our industry-leading long-term growth strategy for years to come.”
“Our Natural Gas Business is core to our company and together with our Electric Business will continue to be a cornerstone of our long-term growth strategy. From an operational and strategic perspective, we remain confident in and committed to our regulated natural gas utilities in Texas, Indiana, Minnesota, and Ohio where we have significant footprints and rate bases.”
- Jason Wells, President and Chief Executive Officer of CenterPoint
