Economy

CenterPoint Energy Acquires Vectren for $6B

CenterPoint Energy Acquires Vectren for $6B

Vectren delivers natural gas to customers in IN and OH, and also provides electricity to the Evansville area in southwestern Indiana.

Shares of CenterPoint, which is funding the deal using debt and equity, closed 2.8 percent lower at $25.94.

Under the terms of the deal, Vectren shareholders will receive $72 in cash for each share of Vectren's common stock. It owns two businesses: Infrastructure Services (VISCO), which provides underground pipeline construction, fix and replacement services; and Energy Services (VESCO), which offers performance contracting services and renewable energy project development. (NYSE:CNP). Parametric Portfolio Ltd Liability Company holds 0.05% in CenterPoint Energy, Inc.

Both companies in statements issued Monday said their business operations are complementary, and said the deal enables them to expand "across a larger USA footprint".

The merged company will retain the CenterPoint name and its Houston headquarters. The company will serve more than 7 million customers, operate electric and natural gas delivery operations in eight states and hold about $29 billion in assets.

The deal will soon require CenterPoint's hit Texas, Louisiana, Minnesota, Mississippi, Oklahoma and Arkansas to Vectren's core markets of OH and Indiana.

Following the acquisition, Vectren would become a CenterPoint Energy company with the combined company's gas utilities operations and the IN electric operation to be headquartered IN Evansville, Ind.

As a combined company, capex costs are expected to total $1 billion for natural gas and $1.13 billion for electricity in 2018, increasing to about $1.1 billion for natural gas and $1.35 billion for electricity by 2022.

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The companies say the deal would allow them to leverage and expand competitive energy-related services across a larger US footprint, and long-term efficiencies for delivery customers.

CenterPoint said it plans to continue running VISCO and VESCO from their respective offices in Indianapolis and Newburgh, IN. The company employs approximately 5500.

Opportunities to leverage and expand competitive energy-related services across a larger USA footprint.

CenterPoint officials say they expect to maintain annual guidance basis EPS growth target of 5% to 7% in 2019 and 2020, "excluding any one-time charges related to the merger".

Prochazka will remain CEO of the combined company. CenterPoint said it will establish an executive position in Evansville, Ind., to handle natural gas utility operations and a chief business officer for Vectren's electric business to directly report to the CenterPoint CEO and "spearhead southwestern Indiana's electric grid modernization and generation transition initiatives recently underway".

Several analysts have released their opinion on CenterPoint Energy, Inc.

In addition, CenterPoint stands to acquire Vectren's non-utility businesses, Vectren Infrastructure Services (VISCO), which provides underground pipeline construction, fix and replacement services, and Energy Services (VESCO), which offers performance contracting services and renewable energy project development. The company has about 8,000 employees. The company is also set to complete construction this year on two solar farms near Evansville that will produce 4 MW combined. The foundation will remain headquartered in Evansville. On Monday, December 4 the stock of CenterPoint Energy, Inc.

On May, 4 is awaited CenterPoint Energy, Inc. "We look forward to working with the talented people at Vectren as we integrate our two companies and build on our proven track records of success". Ftb Advisors has invested 0% in CenterPoint Energy, Inc. CARROLL MILTON sold 43,363 shares worth $1.18 million. Baker Botts LLP served as legal counsel to Vectren.


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