Unitil Corporation's New Milestone with Maine Natural Gas
HAMPTON, N.H. – Unitil Corporation (NYSE: UTL) has taken a significant step forward by entering into a definitive agreement to acquire Maine Natural Gas Company from Avangrid. The deal, valued at $86 million on a debt-free basis, is poised to enhance Unitil's energy distribution capabilities in New England.
Expected to close by the end of the year, pending regulatory approval from the Maine Public Utilities Commission, this acquisition will allow Maine Natural to operate as a wholly-owned subsidiary of Unitil. This strategic move represents not only a financial investment but a commitment to bolstering energy delivery and enhancing the customer experience.
Maine Natural Gas Company: A Growing Provider
Maine Natural Gas Company, which initiated its services in 1999, caters to over 6,300 residential and commercial customers across nine communities in Maine, including the city of Augusta. Its infrastructure consists of roughly 230 miles of distribution pipelines, a foundation that opens up avenues for further customer expansion.
In the last five years, Maine Natural has experienced an average customer growth rate of 4.4% annually, showcasing its integral role in the regional energy landscape. This growth aligns with Unitil’s expansion strategy, enhancing its footprint in a densely populated area.
Impact on Unitil's Market Reach
The acquisition of Maine Natural positions Unitil to serve over 40% of Maine’s total population, particularly in the Greater Portland area, which is known for its vibrant communities and potential for future growth. Additionally, this acquisition follows Unitil's purchase of Bangor Natural Gas Company, further solidifying its presence in the natural gas sector.
“This acquisition complements our existing operations and strengthens our commitment to providing safe and reliable energy,” remarked Thomas P. Meissner, Jr., Chairman and CEO of Unitil. This transition is expected to be accretive to Unitil’s long-term earnings and supports the company’s growth forecasts of 5% to 7% in earnings per share.
Financing and Future Endeavors
To facilitate this strategic acquisition, Unitil has secured financing commitments from Scotiabank, demonstrating confidence in the deal’s prospects and the company’s reliability in managing expanded operations. This partnership not only strengthens Unitil’s financial footing but also highlights the support from prominent financial institutions in enhancing energy infrastructures.
Alongside its financial partners, Unitil is being counseled by specialists from Scotiabank and Dentons, a leading law firm, to navigate the complexities of the acquisition process effectively. Their expertise is crucial as Unitil integrates Maine Natural into its operations, assuring a smooth transition that prioritizes customer satisfaction and service reliability.
About Unitil Corporation
Unitil Corporation stands out as an energy provider dedicated to delivering electricity and natural gas reliably across New England. Their commitment extends beyond energy provision to fostering connections in the communities they serve, employing innovative technologies and sustainable business practices to ensure efficiency.
The company's service network covers Maine, New Hampshire, and Massachusetts, supplying energy to approximately 109,400 electric customers and 97,600 natural gas customers through its recent expansions, including the Bangor acquisition. Unitil remains focused on enhancing not just its operational efficiency but also its community relationships.
Frequently Asked Questions
What is the value of the acquisition between Unitil and Maine Natural?
The acquisition is valued at $86 million on a debt-free basis.
When is the transaction expected to close?
The closing is expected to occur by the end of the year, pending regulatory approval.
How will this acquisition benefit Unitil?
This acquisition is expected to enhance Unitil's market reach, providing long-term earnings growth and increased customer satisfaction.
Who will advise Unitil during this acquisition?
Unitil will be advised by Scotiabank and the law firm Dentons throughout the acquisition process.
How does Maine Natural fit into Unitil's service areas?
Maine Natural’s operations are geographically adjacent to Unitil’s existing service regions, increasing its customer base and operational efficiency.
