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El Paso Electric acquisition by JP Morgan-advised fund lands at FERC

El Paso Electric Co. filed with the Federal Energy Regulatory Commission for approval of its acquisition by an investment fund for an enterprise value of about $4.3 billion, including the Texas utility's net debt.

Under the proposed transaction, Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc., will acquire El Paso Electric for $68.25 per share in cash.

A publicly-traded electric utility, El Paso Electric serves approximately 429,000 customers in the Rio Grande valley in west Texas and southern New Mexico, according to the application. The utility also holds an interest in power generating units representing a total net capacity of approximately 2,157 MW and purchases roughly 239 MW of electricity under long-term power contracts.

Sun Jupiter Holdings LLC is a limited liability company newly formed for the transaction. Following the close of the transaction planned for the first half of 2020, Sun Jupiter will merge with and into El Paso Electric, with El Paso a wholly owned subsidiary of an entity managed and controlled by IIF.

The applicants asked FERC to issue an order by Feb. 10, 2020. (FERC docket EC19-120)

In order to complete the merger, the parties also need to secure approvals from El Paso Electric shareholders, secure other regulatory approvals and meet customary closing conditions.