An energy infrastructure investment fund sponsored byFirst Reserve Management LPagreed to buy all ofGas Natural Inc.'soutstanding shares in a deal with an enterprise value of about $196 million.
The dealvalues Gas Natural's common stock at $13.10 per share, representing anapproximate premium of 39% over the company's 52-week high, according to anOct. 10 news release. Gas Natural shareholders will receive cash in exchangefor their stock and the company plans to continue to pay a quarterly cashdividend of 7.5 cents per share, as well as a prorated dividend for any partialperiod before the deal closing.
Under thedeal, Gas Natural would merge with a new subsidiary of First Reserve and GasNatural will be the surviving entity. No changes would be made to Gas Natural'sorganization, leadership team, customer rates or operations.
The merger is subject to approvals from utility regulatorsin Maine, Montana, North Carolina, Ohio and Gas Natural's shareholders,among other customary closing conditions. It is expected to close in the secondhalf of 2017.
The dealwith First Reserve also includes a "go-shop" period until Nov. 22,during which Gas Natural's board may entertain alternative merger proposalsfrom other parties.
"We view Gas Natural as an ideal platform forlong-term investment in the space given its diversified asset base, strongmanagement team and commitment to its customers," Mark Florian, head ofinfrastructure funds for private equity firm First Reserve, said in an Oct. 10statement.
Janney is serving as exclusive financial adviser to GasNatural, and Kohrman Jackson & Krantz LLP is serving as legal counsel forthe transaction. Lazard is serving as exclusive financial adviser,and Simpson Thacher & Bartlett LLP is serving as legal counselfor First Reserve.
Gas Natural serves about 68,000 customers through itsregulated operations.