Emera Maine to be sold to Calgary-based energy company for $1.3B
Courtesy / Emera Inc. and ENMAX Corp.
Scott Balfour, president and CEO of Emera Inc., and Gianna Manes, president and CEO of ENMAX Corp., announced today that ENMAX plans to acquire Emera Maine for $1.3 billion, which includes roughly $341 million in assumed debt.
Halifax-based Emera Inc. announced today it has agreed to sell its interest in Emera Maine to ENMAX Corp. for $1.3 billion in U.S. currency, a purchase price that includes $959 million in shares and approximately $341 million in assumed debt.
ENMAX’s acquisition of Emera Inc.’s regulated electric transmission and distribution company in Maine is subject to certain conditions, including regulatory approvals, and is anticipated to close in late 2019.
ENMAX Corp. (ENMAX), headquartered in Calgary, Alberta, reported approximately $5.6 billion (CAD) in assets and $2.4 billion (CAD) in revenues in 2018. Its subsidiaries own and operate transmission and distribution infrastructure in Calgary as well as diverse generation facilities in Alberta that include electricity, natural gas and renewable energy.
Emera Inc. stated in a joint news release with ENMAX that the transaction is part of its previously announced three-year funding plan, adding that the proceeds will be used to reduce corporate debt as well as support “capital investment opportunities within its regulated utility businesses.” ENMAX said the acquisition advances its growth strategy through the expansion of the company’s regulated business operations in North America.
"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," Emera Inc. President and CEO Scott Balfour said in the news release. "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 addition of Emera Maine’s rate assets will strengthen its portfolio of regulated subsidiaries and result in 70% of its future cash flows being derived from “regulated and non-commodity sources, providing stable, high-quality earnings to ENMAX.”
The company said it is funding the acquisition 100% through debt.
"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," says ENMAX President and CEO Gianna Manes said in a news release. "The acquisition of Emera Maine is a complementary opportunity for ENMAX to grow our regulated utility business and enhance our connections with customers."
Lawmaker voices concern about possible sale
Rep. Seth Berry, D-Bowdoinham, who is the House chairman of the Energy, Utilities and Technology Committee, told Mainebiz in a telephone interview that he has strong concerns about ENMAX’s proposed acquisition of Emera Maine.
“This is a deal that has huge implications for Maine,” he said. “I am deeply concerned about the increasingly distant ownership and control of our electric utilities. The basic question is: Who controls Maine power? My feeling is that it’s time to stop allowing more and more distant control of Maine’s power and that this proposed acquisition needs to be vetted thoroughly by the Maine Public Utilities Commission as to whether it’s going to be in the best interest of Emera Maine’s customers.”
Berry said Central Maine Power's transition from local ownership to its current ownership by the Spanish multinational energy company Iberdrola provides, in his view, a relevant example of how the return-on-investment interests of outside investors end up superseding the interests of the utility customers. Likewise, he said, the acquisition of the former Bangor Hydro by Halifax-based Emera Inc. in 2001.
"The fiduciary responsibility of the management of Emera Maine has primarily been to the investors of Emera Inc.," he said, noting that if the sale to ENMAX is approved it would put Emera Maine's customers even further-removed from the utility's ownership and investors' interests.
End of an era
Emera Inc.'s first investment outside Canada was Bangor Hydro in 2001. Together with Maine Public Service Co., purchased in 2010, they merged to form Emera Maine. Emera Maine is headquartered in Bangor and serves 159,000 customers in the northern part of the state.
“Our Maine investments have delivered consistent financial results over the past 18 years and have contributed greatly to Emera's evolution into a North American energy leader,” Balfour said. “I want to thank the dedicated team at Emera Maine, who have continuously demonstrated their commitment to working safely and delivering for customers. ENMAX shares these commitments and values which will contribute to a smooth transition.”
Manes said she and her team “recognize and appreciate the long-standing community roots, customer connections and history of service that Emera Maine offers. We look forward to partnering with its capable and valued team to continue to serve Maine."
The transaction is subject to 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.
RBC Capital Markets acted as exclusive financial advisor to Emera on the transaction. Legal advisors to Emera were: Skadden, Arps, Slate, Meagher & Flom LLP and Verrill Dana LLP
CIBC Capital Markets acted as exclusive financial advisor to ENMAX on the transaction. Legal advisors to ENMAX were: Bracewell LLP; Blake, Cassels & Graydon LLP and Bernstein Shur Sawyer & Nelson, P.A.
About Emera Inc.
Emera Inc. is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, with approximately $32 billion CAD in assets and 2018 revenues of more than $6.5 billion CAD. 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. Emera has investments throughout North America, and in four Caribbean countries. Emera's common and preferred shares are listed on the Toronto Stock Exchange.
About ENMAX
ENMAX Corp., through its subsidiaries, makes, moves and sells electricity to residential, small business and large commercial customers and is headquartered in Calgary, Alberta, with approximately $5.6 billion CAD in assets and revenues of $2.4 billion CAD in 2018. ENMAX Power Corp. owns and operates transmission and distribution infrastructure in Calgary and ENMAX Energy Corp. owns diverse generation facilities throughout the province. Through its subsidiaries, ENMAX offers a range of innovative energy solutions to over 669,000 customers across Alberta including electricity, natural gas, renewable energy and other services.
Editor's note: The earlier version of this story has been updated to include the concerns of Rep. Seth Berry about the proposed sale.
Most Recent
Most Recent
0 Comments