Black Hills Corp. to Buy SourceGas for $1.89 billion
July 13, 2015
Black Hills Corp. (NYSE:BKH) has announced it has entered into a definitive agreement to acquire SourceGas Holdings LLC from Alinda Capital Partners and GE Energy Financial Services. SourceGas operates four regulated natural gas utilities serving approximately 425,000 customers in Arkansas, Colorado, Nebraska and Wyoming and a 512 mile regulated intrastate natural gas transmission pipeline in Colorado.
Black Hills Corp. is acquiring SourceGas for total consideration of $1.89 billion, including reimbursement of capital expenditures through closing, estimated to be $200 million, and the assumption of $720 million of debt projected at closing.
The combination of Black Hills Corp. and SourceGas brings together two well-regarded utility operators, with complementary geographic footprints, creating a stronger utility company with enhanced operational expertise and financial resources to meet the region’s future energy needs. The combined entity will serve more than 1.2 million electric and natural gas utility customers in 790 communities in eight Rocky Mountain and Midcontinent states. Black Hills Corp. will operate the acquired company under the name Black Hills Energy.
“This announcement delivers on our commitment to grow earnings and create long-term shareholder value,” said David R. Emery, chairman, president and chief executive officer of Black Hills Corp. “Adding SourceGas to our strong utility base provides operational and financial benefits to all the customers and communities we serve. We are excited to significantly expand our presence in Colorado, Nebraska, and Wyoming and look forward to serving customers and developing new relationships in Arkansas.”
Investments funds managed by Alinda Capital Partners own 50% of SourceGas Holdings LLC.
This transaction was completed on February 12, 2016.