Emera Inc. agreed to sell its Maine operations to Calgary, Alberta-headquartered ENMAX Corp. for US$1.30 billion, comprising US$959 million of shares plus assumed debt, the company announced March 25.
The sale of Emera Maine, a regulated electric transmission and distribution company, will help Nova Scotia-headquartered Emera to reduce corporate-level debt and support its three-year C$6.5 billion regulated capital program. The company expects to raise approximately C$2.1 billion of equity proceeds upon the close of this transaction and the sale of its New England gas generation portfolio.
"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 President and CEO of Emera Scott Balfour said.
On ENMAX's end, the deal supports its growth strategy through the expansion of its regulated utility business in North America. The deal will result to a 50% increase in the company's regulated rate base and is expected to be immediately accretive to earnings and cash flow.
Bangor, Maine-headquartered Emera Maine serves 159,000 customers in the northern part of the state.
The deal is subject to certain conditions and obtaining regulatory approvals, including those of the Maine Public Utilities Commission and Federal Energy Regulatory Commission and under the Hart-Scott-Rodino Act. The deal is expected to close late in 2019.
Emera hired RBC Capital Markets as exclusive financial adviser, and Skadden Arps Slate Meagher & Flom LLP and Verrill Dana LLP as legal advisers. ENMAX tapped CIBC Capital Markets as exclusive financial adviser and Bracewell LLP, Blake Cassels & Graydon LLP and Bernstein Shur Sawyer & Nelson PA as legal advisers.