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JP Morgan-advised fund to acquire El Paso Electric for $4.3B

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JP Morgan-advised fund to acquire El Paso Electric for $4.3B

Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc., reached a deal to acquire El Paso Electric Co. for $68.25 per share in cash.

The purchase price represents a 17% premium to El Paso Electric's closing price May 31 of $58.20. The deal represents an enterprise value of about $4.3 billion, including El Paso Electric's net debt.

Infrastructure Investments Fund, or IIF, an $11.3 billion vehicle, committed a bridge financing facility led by Bank of America Merrill Lynch to support the deal.

"As we look to the future and the long-term investment required to meet the growing energy needs of our communities, we are confident IIF is the ideal partner for our region and [El Paso Electric]," El Paso Electric President and CEO Mary Kipp said in a June 3 statement. "This is a tremendous opportunity to scale and prepare the company for a clean energy future that is local and sustainable."

Under the deal, El Paso Electric will remain an independently operated, regulated utility headquartered in El Paso, Texas, and its current workforce will remain in place. As part of the deal, customers will receive $21 million in credits on bills over 36 months, according to a news release.

El Paso Electric provides generation, transmission and distribution service to about 428,000 retail and wholesale customers in West Texas and southern New Mexico.

Lazard is serving as financial advisor and Baker Botts LLP is acting as legal advisor to El Paso Electric. Bank of America Merrill Lynch is acting as exclusive financial advisor and Skadden Arps Slate Meagher & Flom LLP is acting as legal advisor to IIF.

The deal is expected to close in the first half of 2020, subject to the approval of El Paso Electric shareholders, receipt of regulatory approvals and other customary closing conditions.