Bernhard Capital to buy natural gas assets from CenterPoint for US$1.2 billion

Bernhard Capital’s portfolio company Delta Utilities has agreed to buy CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution businesses which include around 12 000 miles of main pipeline in Louisiana and Mississippi serving approximately 380 000 metered customers.

Jeff Jenkins, founder and partner at Bernhard Capital Partners, said the acquisition builds upon the firm’s recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, adding that “once both transactions are complete, Delta Utilities will be a leading natural gas utility in Louisiana and Mississippi and among the top 40 providers in the US”.

Jason Wells, President and CEO of NYSE-listed CenterPoint Energy, said the transaction will allow the firm to optimise its portfolio of utility operations and efficiently recycle approximately US$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”.

“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,” said Wells.

“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.”

CenterPoint’s Louisiana and Mississippi LDCs represent less than 4% of the company’s overall rate base.

Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC served as CenterPoint’s financial advisers. Latham and Watkins LLP, Phelps Dunbar LLP, and Brunini, Grantham, Grower & Hewes, PLLC served as CenterPoint’s legal advisers.

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