Calgary-based ENMAX Corporation is buying Emera Maine, a regulated electric transmission and distribution company in Maine, for close to $2 billion from Halifax-based Emera.
In a news release, it was noted that the sale would be $1.286 billion and including the assumed debt, aggregate enterprise value is forecasted to be approximately $1.8 billion on closing.
“Transmission and distribution utilities play a vital role in delivering essential electricity services to our homes, communities and businesses, and as electricity customer needs evolve, utilities like ENMAX and Emera Maine are adapting and investing to ensure customers continue to benefit from access to safe, reliable services,” said Gianna Manes, President and CEO of ENMAX, in a statement.
“The acquisition of Emera Maine is a complementary opportunity for ENMAX to grow our regulated utility business and enhance our connections with customers.”
Emera said the transaction is part of a previously announced three-year funding plan and together with the previously announced sale of its New England Gas Generation portfolio will, on closing, fully achieve the targeted asset sale component of the plan.
Upon closing of these transactions Emera will have raised approximately $2.1 billion CAD of equity proceeds which will be used to reduce Emera corporate level debt and support its $6.5 billion three-year regulated capital program, it said.
“We are very pleased with the progress we’ve made on optimizing our portfolio and, upon closing, proceeds raised through select asset sales will give us greater financial flexibility as we fund our continued growth,” said Scott Balfour, President and CEO of Emera, in a statement. “One of our priorities has been to identify a buyer for Emera Maine that has the technical skills, experience and financial strength to assure that our customers will continue to receive high quality, reliable service. ENMAX more than measures up on these essential qualities.”
ENMAX said the transaction reflects the company’s strategy to grow through the expansion of its regulated utility business in North America, leveraging ENMAX’s established expertise in the provision of regulated transmission and distribution electricity services.
“The addition of approximately $900 million CAD in regulated rate base assets to ENMAX’s portfolio results in a 50 per cent increase in regulated rate base, with 70 per cent of ENMAX’s future cash flows being derived from regulated and non-commodity sources, providing stable, high-quality earnings to ENMAX. ENMAX is funding this transaction 100 per cent through debt. Inclusive of incremental transaction financing, this transaction will be immediately accretive to earnings and cash flow,” it said.
Emera Maine is headquartered in Bangor and serves 159,000 customers in the northern part of the state.
The transaction is subject to certain conditions and obtaining regulatory approvals, including those of the Maine Public Utilities Commission, the United States Federal Energy Regulatory Commission and pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, and is anticipated to close late in 2019.
Emera Inc. is headquartered in Halifax, Nova Scotia, with approximately $32 billion in assets and 2018 revenues of more than $6.5 billion. The company primarily invests in regulated electricity generation and electricity and gas transmission and distribution with a strategic focus on transformation from high carbon to low carbon energy sources.
ENMAX has about $5.6 billion in assets and revenues of $2.4 billion in 2018. ENMAX Power Corporation owns and operates transmission and distribution infrastructure in Calgary and ENMAX Energy Corporation owns diverse generation facilities throughout the province. Through its subsidiaries, ENMAX offers a range of energy solutions to over 669,000 customers across Alberta including electricity, natural gas, renewable energy and other services.
Mario Toneguzzi is a Troy Media business reporter based in Calgary.
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